<PAGE>

                  NOTE:  THIS TABLE OF CONTENTS IS NOT PART OF THE
                  CINERGY CORP. NON-UNION EMPLOYEES' PENSION
                  PLAN; INSTEAD, THIS TABLE OF CONTENTS IS MERELY
                  FOR CONVENIENCE OF REFERENCE

                                                 TABLE OF CONTENTS
<TABLE>
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                                                                                                           Page

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INTRODUCTION .................................................................................................1

ARTICLE 1     DEFINITIONS.....................................................................................1

ARTICLE 2     EFFECTIVE DATE OF PLAN.........................................................................32

ARTICLE 3     ELIGIBILITY AND PARTICIPATION..................................................................32
     3.1      Date of Participation..........................................................................32
     3.2      Intermittent Employees and Temporary Employees.................................................33
     3.3      Leased Employees...............................................................................33
     3.4      Transfers of Employment........................................................................33
     3.5      Transfers of Participants and Plan Assets To and From the Cinergy Corp.
              Union Employees' Retirement Income Plan and Cinergy Corp. Union
              Employees' Pension Plan........................................................................34

ARTICLE 4     AMOUNT OF LIFE-ONLY PENSION....................................................................36
     4.1      Normal Retirement Pension Formula..............................................................36
     4.2      Normal Retirement Benefits for Participants in the PSI Plan....................................36
     4.3      Normal Retirement Benefits for Participants in the MRP or RIP..................................37
     4.4      General Method of Computing Annual Pension for Retirement at Early
              Retirement Date................................................................................37
     4.5      General Method of Computing Annual Pension for a Terminated Vested
              Participant....................................................................................42
     4.6      Maximum Pension................................................................................45
     4.7      Benefits if Plan Becomes a Top-Heavy Plan......................................................48

ARTICLE 5     SEVERANCE FROM SERVICE-VESTING.................................................................49
     5.1      Vesting Requirement............................................................................49
     5.2      Severance from Service before Vesting..........................................................50
     5.3      Severance from Service after Vesting...........................................................51

ARTICLE 6     SPOUSE'S BENEFIT...............................................................................51
     6.1      Determination of Spouse's Benefit..............................................................51
     6.2      Method of Payment of Spouse's Benefit..........................................................54

ARTICLE 7     FORMS OF PENSION...............................................................................55
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     7.1      Normal Forms of Pension........................................................................55
     7.2      Optional Forms of Retirement Income............................................................57

ARTICLE 8     PAYMENT OF PENSION.............................................................................68
     8.1      Timing of Payment..............................................................................68
     8.2      Method of Payment..............................................................................69
     8.3      Small Benefits.................................................................................69
     8.4      Facility of Payment............................................................................69
     8.5      Benefits for Late Retirees, Reemployed Retirees and Reemployed Terminated
              Vested Participants............................................................................70
     8.6      Required Payment of Benefits...................................................................71
     8.7      Direct Rollovers of Eligible Distributions.....................................................76

ARTICLE 9     RETIREE MEDICAL/DENTAL BENEFITS................................................................76
     9.1      Purpose........................................................................................76
     9.2      Eligibility....................................................................................77
     9.3      Separate Account...............................................................................77
     9.4      Impossibility of Diversion Prior To Satisfaction of All Liabilities............................77
     9.5      Reversion Upon Satisfaction of All Liabilities.................................................77
     9.6      Forfeitures....................................................................................78
     9.7      Employer Contributions To The Medical/Dental Benefits Account..................................78
     9.8      Medical/Dental Benefits........................................................................78

ARTICLE 10    NONALIENATION OF BENEFITS......................................................................79

ARTICLE 11    ADMINISTRATION.................................................................................79
     11.1     Administrator..................................................................................79
     11.2     Removal and Replacement of Committee Members...................................................80
     11.3     Disqualification and Resignation...............................................................80
     11.4     Chairperson, Services, and Counsel.............................................................80
     11.5     Meetings.......................................................................................80
     11.6     Quorum.........................................................................................81
     11.7     Action Without Meeting.........................................................................81
     11.8     Notice to Trustee of Changes in Membership.....................................................81
     11.9     Correction of Defects..........................................................................81
     11.10    Reliance Upon Legal Counsel....................................................................82
     11.11    Expenses.......................................................................................82
     11.12    Indemnification................................................................................82
     11.13    Powers and Duties of Committee.................................................................82
     11.14    Matters Specifically Excluded from Jurisdiction................................................84

ARTICLE 12    BENEFIT CLAIMS PROCEDURES......................................................................84

ARTICLE 13    FUNDING POLICY AND METHOD......................................................................85
ARTICLE 14    MISCELLANEOUS..................................................................................86
     14.1     No Enlargement of Employee Benefits............................................................86
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                                                                2

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     14.2     Reemployment...................................................................................86
     14.3     Qualified Military Service.....................................................................87
     14.4     Notice of Address..............................................................................87
     14.5     Data...........................................................................................87
     14.6     No Individual Liability........................................................................88
     14.7     Participant's Statement of Agreement...........................................................88
     14.8     No Diversion of Assets.........................................................................88
     14.9     Governing Laws.................................................................................88
     14.10    Severability...................................................................................89
     14.11    Interpretation and Regulation of Plan..........................................................89
     14.12    Communications by Participants.................................................................89
     14.13    Headings.......................................................................................89
     14.14    Accrued Benefit Not to be Decreased by Amendment...............................................89

ARTICLE 15    TRUSTS AND INSURANCE CONTRACTS.................................................................90
     15.1     Trusts and Insurance Contracts.................................................................90
     15.2     Irrevocability.................................................................................91
     15.3     Sufficiency of Pension Fund....................................................................91

ARTICLE 16    CONTRIBUTIONS..................................................................................92

ARTICLE 17    APPROVAL UNDER INTERNAL REVENUE CODE...........................................................92

ARTICLE 18    TEMPORARY RESTRICTIONS ON BENEFITS.............................................................92
     18.1     Temporary Restrictions.........................................................................92

ARTICLE 19    AMENDMENT AND TERMINATION......................................................................94
     19.1     Right to Amend or Terminate....................................................................94
     19.2     Effect of Termination..........................................................................95
     19.3     Merger and Consolidation of Plan...............................................................97
     19.4     Post-Change in Control Merger, Consolidation, or Transfer of Pension Plan
              Assets or Liabilities..........................................................................97
     19.5     General Protection of Benefits in the Event of a Change in Control.............................98
     19.6     Post-Change in Control Surplus Reversion.......................................................98

ARTICLE 20    AUTHORIZED TRANSACTION.........................................................................99

ARTICLE 21    PARTICIPATION BY OTHER EMPLOYERS...............................................................99
     21.1     Adoption of Plan...............................................................................99
     21.2     Withdrawal from Participation.................................................................100
     21.3     Cinergy as Agent for Employers................................................................101

ARTICLE 22    CONTINUANCE BY A SUCCESSOR....................................................................101
ARTICLE 23    PROVISIONS RELATING TO TOP-HEAVY PLAN.........................................................102
     23.1     Construction of this Section..................................................................102
     23.2     Top-Heavy Determination.......................................................................102
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ARTICLE 24    MERGER WITH THE MRP...........................................................................104
     24.1     Acceptance of Assets and Liabilities of MRP Trust.............................................104
     24.2     Participation of MRP Participants.............................................................104

ARTICLE 25    SPIN OFF OF PSI PLAN..........................................................................105
     25.1     Acceptance of Assets and Liabilities of PSI Plan Trust........................................105
     25.2     Participation of PSI Plan Participants........................................................105
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                                                              4
<PAGE>

                                  ADOPTED PURSUANT TO RESOLUTIONS OF THE CINERGY
                                CORP. BOARD OF DIRECTORS DATED DECEMBER 18, 1997

                             CINERGY CORP. NON-UNION

                             EMPLOYEES' PENSION PLAN

               (As Amended and Restated Effective January 1, 1998)

                                  INTRODUCTION

This Plan is a complete restatement of the MRP, effective January 1, 1998.
Effective January 1, 1998, the MRP is renamed the Cinergy Corp. Non-Union
Employees' Pension Plan. Also, effective as of December 31, 1997, the assets and
liabilities of the PSI Plan attributable to Eligible Employees are merged into
this Plan.

This Plan is maintained for the exclusive benefit of Eligible Employees. The
purpose of the Plan is to provide retirement income for Eligible Employees. The
Plan is designed to satisfy the requirements of Code subsection 401(a) and the
applicable requirements of ERISA

                                    ARTICLE 1
                                   DEFINITIONS

As used in this document, the following words and phrases, when capitalized,
will have the meanings set forth below, unless a different meaning is plainly
required by the context.

1.1      "Absence from Service" means, with respect to each Employee, his
         absence from service (with or without pay) with his Employer for any
         reason other than a quit, resignation, discharge, retirement, or death,
         including, but without limitation because of enumeration, vacation,
         holiday, sickness, disability, leave of absence (unless otherwise
         required by applicable law), or other layoff. If an Employee is totally
         disabled and qualifies for benefits under Cinergy's Long-Term
         Disability Plan, the expiration of his Absence from

                                      1

<PAGE>

         Service will not occur until the later of (a) the date he no longer
         qualifies for benefits under Cinergy's Long-Term Disability Plan, or
         (b) his Normal Retirement Date, Early Retirement Date, or Actual
         Separation Date, whichever is applicable.

1.2      "Accrued Vacation Pay" means, with respect to an Exempt Employee or a
         Non-Exempt Employee, the compensation received at his Severance from
         Service for unused accrued vacation pursuant to the Employer's
         applicable policy.

1.3      "Active Participant" means a Participant for whom benefits are being
         accrued under the Plan on the applicable date.

1.4      "Actual Separation Date" means:

         (a)      with respect to a Participant who either (1) retires on or
                  after his Normal Retirement Date, or (2) who retires on an
                  Early Retirement Date, the first day of the calendar month
                  coincident with or following the date of the Participant's
                  Severance from Service; or

         (b)      with respect to a Participant who incurs a Severance from
                  Service before he reaches age 50 and who is entitled to
                  benefits determined under the provisions of Section 5.3
                  (Severance from Service after Vesting), the date of the
                  Participant's Severance from Service.

1.5      "Actuarial Equivalent" means a benefit having the same actuarially
         determined value as the benefit that the Actuarial Equivalent replaces.
         The determination of an Actuarial Equivalent will be based on the
         following actuarial assumptions, except as provided in Subsection (c)
         or (d) below:

                                            2

<PAGE>

         (a)      MORTALITY:

                  Participants in accordance with the UP-1984 Table, with no
                  rating of ages; Spouses and Contingent Annuitants in
                  accordance with the UP-1984 Table, with ages rated down three
                  years;

         (b)      INTEREST:

                  7-1/2% per annum, compounded annually.

         (c)      With respect to any lump sum payment that may be payable under
                  the Plan during a Plan Year, the Actuarial Equivalent will be
                  calculated using the mortality table as prescribed from time
                  to time by the Secretary of the Treasury (currently the 1983
                  Group Annuity Mortality Table with a 50/50 mix of males and
                  females) and an interest rate equal to the annual rate of
                  interest on 30 year Treasury securities as specified by the
                  Commissioner of Internal Revenue for the second full calendar
                  month preceding the first day of the Plan Year.

         (d)      In the case of a Participant who had an accrued benefit under
                  the MRP, RIP, or the PSI Plan as of December 31, 1997, and who
                  has a Severance from Service Date after December 31, 1997, no
                  benefit determination will produce an amount that is less than
                  that which would have been produced utilizing both the
                  actuarial assumptions specified in the MRP, RIP, or the PSI
                  Plan, whichever is applicable, as in effect on December 31,
                  1997, and the annual pension accrued as of December 31, 1997,
                  determined under the provisions of the MRP, the RIP, or the
                  PSI Plan, whichever is applicable, as then in effect.

1.6      "Additional Separation Date" means, with respect to a Participant who
         has an Initial Separation Date and who is later reemployed by an
         Employer, the first day of the calendar month coincident with or
         following the Participant's next Severance from Service Date.

                                         3

<PAGE>

         However, if the Participant has multiple Severance from Service Dates
         after his Initial Separation Date, then he will have an Additional
         Separation Date for each Severance from Service, which will be the
         first day of the calendar month coincident with or following the
         Participant's applicable Severance from Service Date.

1.7      "Affiliate" means any employer that together with the Employer is under
         common control or a member of an affiliated service group as determined
         under Code subsections 414(b), (c), (m), and (o). In determining
         whether an employer is a member of a controlled group for purposes of
         Section 4.6 (Maximum Pension), the rules of Code subsections 414(b) and
         (c) will be applied as modified by Code subsection 415(h).

1.8      "Aggregate Account" means, with respect to a Participant who is also
         participating in a Qualified Defined Contribution Plan that is included
         in an Aggregation Group, the sum of: (a) the Participant's account
         balance under the plan as of the Valuation Date; (b) an adjustment for
         any contributions due under the plan as of the Determination Date (the
         adjustment will be the amount of any contributions actually made after
         the Valuation Date but before the Determination Date, except for the
         first Plan Year when the adjustment will also reflect the amount of any
         contributions made after the Determination Date that are allocated as
         of a date in the first Plan Year); and (c) any Plan distributions made
         within the Plan Year that includes the Determination Date or within the
         four preceding Plan Years. However, in the case of distributions made
         after the Valuation Date and prior to the Determination Date,
         distributions are not included as distributions for Top-Heavy purposes
         to the extent that the distributions are already included in the
         Participant's Aggregate Account balance as of the Valuation Date.

1.9      "Aggregation Group" means either a Required Aggregation Group or a
         Permissive Aggregation Group.

                                    4

<PAGE>

1.10     "Annual Addition" means, with respect to a Participant for a Plan Year,
         the following amounts credited to a Participant's account in any
         Qualified Defined Contribution Plan maintained by the Employer or an
         Affiliate for the Plan Year: employer contributions, employee
         contributions (other than rollover contributions); forfeitures; amounts
         allocated, after March 31, 1984, to an individual medical account, as
         defined in Code paragraph 415(l)(2), that is part of a pension or
         annuity plan maintained by the Employer or an Affiliate; and amounts
         derived from contributions paid or accrued after March 31, 1984, that
         are attributable to post-retirement medical benefits, allocated to the
         separate account of a Key Employee, under a welfare benefit fund, as
         defined in Code subsection 419(e), maintained by the Employer or an
         Affiliate.

1.11     "Annual Pension" means, with respect to a Participant, the amount of
         the Participant's pension, expressed as an annual benefit for the
         Participant's lifetime.

1.12     "Annual Performance Cash Award" means, with respect to an Employee, the
         cash award received by the Employee under the provisions of an
         Employer's annual bonus or incentive pay plan or program, including,
         but without limitation because of enumeration, the Cinergy Annual
         Incentive Plan, the Cinergy Non-Union Employees' Incentive Plan, or any
         successor Plan.

1.13     "Annuity Starting Date" means, with respect to a Participant, the first
         day of the first period for which a Plan benefit is paid as an annuity
         or, in the case of a benefit not payable in the form of an annuity, the
         first day on which all events have occurred that entitle the
         Participant to the benefit.

1.14     "Base Salary" means, with respect to an Exempt Employee, the monthly
         base salary received as remuneration for services performed for the
         relevant period, exclusive of any allowances, premiums, bonuses,
         overtime, or other forms or types of compensation.

                                    5

<PAGE>

1.15     "Base Wage" means, with respect to a Non-Exempt Employee, the hourly
         base rate of pay received as remuneration for services performed for
         the relevant period, exclusive of any allowances, premiums, bonuses,
         overtime, or other forms or types of compensation, multiplied by his
         hours worked during the applicable period.

1.16     "Beneficiary" means, with respect to each Participant, the person or
         persons who are to receive benefits under the Plan after the
         Participant's death.

1.17     "Board of Directors" means the duly constituted board of directors of
         Cinergy on the applicable date.

1.18     "Break in Service" means, with respect to each Regular Employee, a
         Period of Severance of at least 12 consecutive months. With respect to
         an Intermittent Employee or a Temporary Employee, a "Break in Service"
         means a Plan Year during which he completes 500 or fewer Hours of
         Service.

1.19     "CG&E" means The Cincinnati Gas & Electric Company, and any related
         company that adopted the MRP or the RIP.

1.20     "Change in Control" means any of the following events have occurred:

         (a)      Any "person" or "group" (within the meaning of subsection
                  13(d) and paragraph 14(d)(2) of the Securities Exchange Act)
                  is or becomes the "beneficial owner" (as defined in Rule 13d-3
                  under the Securities Exchange Act), directly or indirectly, of
                  securities of Cinergy (not including in the securities
                  beneficially owned by such person or group any securities
                  acquired directly from Cinergy or an Affiliate) representing
                  50% or more of the combined voting power of Cinergy's then
                  outstanding securities, excluding any person or group who
                  becomes such a beneficial owner in connection with a
                  transaction described in Paragraph (1) of Subsection (b)
                  below;

                                         6

<PAGE>

         (b)      There is consummated a merger or consolidation of
                  Cinergy or any direct or indirect subsidiary of Cinergy with
                  any other corporation, other than (1) a merger or
                  consolidation that would result in the voting securities of
                  Cinergy outstanding immediately prior to the merger or
                  consolidation continuing to represent (either by remaining
                  outstanding or by being converted into voting securities of
                  the surviving entity or any parent thereof) at least 50% of
                  the combined voting power of the securities of Cinergy or such
                  surviving entity or any parent thereof outstanding immediately
                  after the merger or consolidation, or (2) a merger or
                  consolidation effected to implement a recapitalization of
                  Cinergy (or similar transaction) in which no person is or
                  becomes the beneficial owner, directly or indirectly, of
                  securities of Cinergy (not including in the securities
                  beneficially owned by such person any securities acquired
                  directly from Cinergy or its Affiliates other than in
                  connection with the acquisition by Cinergy or its Affiliates
                  of a business) representing 25% or more of the combined voting
                  power of Cinergy's then outstanding securities;

         (c)      During any period of two consecutive years, individuals who at
                  the beginning of that period constitute the Board of Directors
                  and any new director (other than a director whose initial
                  assumption of office is in connection with an actual or
                  threatened election context, including but not limited to a
                  consent solicitation, relating to the election of directors of
                  Cinergy) whose appointment or election by the Board of
                  Directors or nomination for election by Cinergy's shareholders
                  was approved or recommended by a vote of at least two-thirds
                  (2/3) of the directors then still in office who either were
                  directors at the beginning of that period or whose
                  appointment, election or nomination for election was
                  previously so approved or recommended cease for any reason to
                  constitute a majority of the Board of Directors; or

         (d)      The shareholders of Cinergy approve a plan of complete
                  liquidation or dissolution of Cinergy or there is consummated
                  an agreement for the sale or disposition by Cinergy of all or
                  substantially all of Cinergy's assets, other than a sale or
                  disposition by

                                          7

<PAGE>

                  Cinergy of all or substantially all of Cinergy's assets to an
                  entity, at least 60% of the combined voting power of the
                  voting securities of which are owned by shareholders of
                  Cinergy in substantially the same proportions as their
                  ownership of Cinergy immediately prior to such sale.

1.21     "Cinergy" means Cinergy Corp., a Delaware corporation, and any
         corporation that succeeds to its business and adopts the Plan.

1.22     "Claimant" means a person submitting a claim for benefits under the
         Plan.

1.23     "Code" means the Internal Revenue Code of 1986, as amended from time to
         time, and interpretive rulings and regulations.

1.24     "Committee" means the benefits committee established pursuant to
         Article 11 (Administration) to serve as Plan administrator.

1.25     "Contingent Annuitant" means, with respect to any Participant electing
         a contingent pension option under Section 7.2 (Optional Forms of
         Retirement Income), the person designated by the Participant to receive
         a contingent pension after the Participant's death.

1.26     "Covered Compensation" means, with respect to a Participant, the
         average (without indexing) of the annual Social Security taxable wage
         bases under the Social Security Act for each year during the 35
         calendar years ending with the last day of the calendar year in which
         the Participant reaches his Social Security Retirement Age.

1.27     "Defined Benefit Plan Fraction" means, with respect to an individual
         participating in one or more Qualified Defined Benefit Plans for any
         calendar year, the fraction, the numerator of which is the individual's
         Projected Annual Benefit under the Qualified Defined Benefit Plans
         (determined as of the end of the calendar year), and the denominator of
         which is the

                                       8

<PAGE>

         lesser of: (a) the product of 1.25 (1.0 if the Plan is a Top-Heavy
         Plan for the particular calendar year) multiplied by the dollar
         limitation in effect under Code subparagraph 415(b)(1)(A) for that
         calendar year, or (b) the product of 1.4 multiplied by the amount that
         may be taken into account under Code subparagraph 415(b)(1)(B) with
         respect to the individual under the Qualified Defined Benefit Plans
         for the calendar year.

1.28     "Defined Contribution Plan Fraction" means, with respect to an
         individual participating in one or more Qualified Defined Contribution
         Plans for any calendar year, the fraction, the numerator of which is
         the sum of the Annual Additions with respect to the Participant
         (determined as of the close of the calendar year), and the denominator
         of which is the lesser of the following amounts (determined for that
         calendar year and for each prior calendar year of service with the
         Employer): (a) the product of 1.25 (1.0 if the Plan is a Top-Heavy Plan
         for the particular calendar year) multiplied by the dollar limitation
         in effect under Code subparagraph 415(c)(1)(A) for the calendar year
         (determined without regard to Code paragraph 415(c)(6)), or (b) the
         product of 1.4 multiplied by the amount that may be taken into account
         under Code subparagraph 415(c)(1)(B) with respect to that individual
         under all Qualified Defined Contribution Plans for the calendar year.

1.29     "Dependent" means any individual who is eligible for coverage under the
         Medical/Dental Plan as the "spouse" or "dependent" of an Eligible
         Retiree.

1.30     "Determination Date" means, for purposes of determining whether the
         Plan is a Top-Heavy Plan for any Plan Year, the last day of the
         preceding Plan Year, or, for the first Plan Year, the last day of the
         Plan Year.

1.31     "Direct Rollover" means a payment by the Plan to the Eligible
         Retirement Plan specified by the Distributee.

                                       9

<PAGE>

1.32     "Disability Date" means, with respect to a Participant, the date the
         Participant is first determined to be totally disabled under Cinergy's
         Long Term Disability Plan, as amended from time to time.

1.33     "Distributee" means an Employee or former Employee. In addition, the
         Employee's or former Employee's surviving Spouse, and the Employee's or
         former Employee's Spouse who is the alternate payee under a Qualified
         Domestic Relations Order are Distributees with regard to the interest
         of the Spouse or former Spouse.

1.34     "Early Retirement Date" means, with respect to each Participant who has
         satisfied the Vesting Requirement, and whose Severance from Service
         occurs on or after his 50th birthday but prior to his Normal Retirement
         Date, the first day of the calendar month coincident with or following
         his Severance from Service.

1.35     "Earnings" means, with respect to any Employee for any period of
         reference, the sum of the Employee's: (a) Base Salary or Base Wage, (b)
         Overtime Pay, (c) Shift Premiums, (d) Work Schedule Recognition Pay,
         (e) Holiday Premiums, (f) Accrued Vacation Pay, (g) Sabbatical Vacation
         Pay, (h) Performance Lump Sum Pay, and (i) Annual Performance Cash
         Awards. "Earnings" does not include (a) reimbursements or other expense
         allowances, (b) fringe benefits (cash and noncash) other than those
         named in the preceding sentence, (c) moving and relocation expenses,
         (d) deferred compensation, (e) welfare benefits, (f) Long-Term
         Performance Awards, (g) Executive Individual Incentive Awards, (h)
         other forms of compensation or remuneration that are not specifically
         named in the preceding sentence, or (i) any payments received by an
         Employee from any Affiliate that is not an Employer.

         Notwithstanding the foregoing provisions of this Section, an Employee's
         Earnings taken into account for any Plan Year will not exceed $150,000,
         as adjusted pursuant to Code paragraph 401(a)(17).

                                      10

<PAGE>

1.36     "Eligible Employee" means an Employee other than a Leased Employee or
         an Employee whose terms and conditions of employment are governed by a
         collective bargaining agreement that does not provide for participation
         in this Plan.

1.37     "Eligible Individual" means an Eligible Retiree or a Dependent.

1.38     "Eligible Retiree" means an individual who:

         (a)      is a Retired Participant who is also eligible to participate
                  in the Medical/Dental Plan, and

         (b)      is not a Key Employee at any time during the current Plan Year
                  and has not been a Key Employee at any time during any
                  previous Plan Year for which contributions were made for that
                  individual's benefit to the Medical/Dental Benefits Account.

1.39     "Eligible Retirement Plan" means an individual retirement account
         described in Code subsection 408(a), an individual retirement annuity
         described in Code subsection 408(b), an annuity plan described in Code
         subsection 403(a), or a qualified trust described in Code subsection
         401(a), that accepts the Distributee's Eligible Rollover Distribution.
         However, in the case of an Eligible Rollover Distribution to a
         surviving Spouse, an Eligible Retirement Plan is an individual
         retirement account or individual retirement annuity.

1.40     "Eligible Rollover Distribution" means any distribution of all or a
         portion of the balance to the credit of the Distributee, except that an
         Eligible Rollover Distribution does not include: any distribution that
         is one of a series of substantially equal periodic payments (not less
         frequently than annually) made for the life (or life expectancy) of the
         Distributee or the joint lives (or joint life expectancies) of the
         Distributee and the Distributee's Beneficiary, or for a specified
         period of ten years or more; any distribution to the extent that the
         distribution is required under Code paragraph 401(a)(9); and the
         portion of any

                                       11

<PAGE>

         distribution that is not includable in gross income (determined without
         regard to the exclusion for net unrealized appreciation with respect to
         employer securities).

1.41     "Employee" means any person who is employed by an Employer, other than
         as an employee classified by his Employer as a summer laborer or summer
         employee, and who receives compensation that the Employer initially
         reports on a federal wage and tax statement (Form W-2). For purposes of
         crediting Service or Years of Eligibility Service for purposes of
         eligibility to participate and vesting and, except as otherwise
         provided, for purposes of the rules set out in Section 4.6 (Maximum
         Pension) and Article 23 (Provisions Relating to Top-Heavy Plan), the
         term "Employee" includes a Leased Employee.

1.42     "Employer" means Cinergy and any Affiliate that, with the consent of
         the Board of Directors, elects to participate in the Plan pursuant to
         Section 21.1 (Adoption of Plan) and any successor corporation or other
         organization or entity that adopts the Plan pursuant to Article 22
         (Continuance by a Successor). If any Affiliate withdraws from
         participation in the Plan pursuant to Section 21.2 (Withdrawal from
         Participation), that Affiliate will cease to be an Employer.

1.43     "Employment Commencement Date" means, with respect to each Employee,
         the date as of which the Employee is first entitled to be credited with
         an Hour of Service.

1.44     "ERISA" means the Employee Retirement Income Security Act of 1974, as
         amended from time to time, and interpretive rulings and regulations.

1.45     "Executive Individual Incentive Awards" means, with respect to an
         Employee, any cash or stock-based award (other than Annual Performance
         Cash Awards) received by a Highly Compensated Participant pursuant to
         the terms of any individualized bonus or incentive pay plan or program,
         including, but without any limitation because of enumeration, any
         retention or signing bonus.

                                          12

<PAGE>

1.46     "Exempt Employee" means an Eligible Employee whose pay is customarily
         computed on a salaried basis, and whose employment is not subject to
         FLSA overtime and record keeping provisions.

1.47     "Final Average Earnings" means the average of the Participant's Section
         415 Compensation over the five consecutive years of employment with his
         Employer that provide the highest average, excluding compensation in
         years before January 1, 1984, and compensation in years after the close
         of the last Plan Year in which the Plan is determined to be a Top-Heavy
         Plan.

1.48     "FLSA" means the Fair Labor Standards Act of 1938, as amended from time
         to time, and interpretive rulings and regulations.

1.49     "Group Annuity Contract" means Group Annuity Contract No. 9599GAC
         issued by John Hancock Mutual Life Insurance Company, as amended or
         replaced from time to time.

1.50     "Highest Average Earnings" means a Participant's highest average annual
         Earnings for any three consecutive calendar years out of his last ten
         years of Participation. However, if the Participant completes fewer
         than three years of Participation, his Highest Average Earnings will
         mean his average annual Earnings for his total years of Participation.
         If a Participant is totally disabled and qualifies for benefits under
         Cinergy's Long-Term Disability Plan until his Normal Retirement Date,
         Early Retirement Date, or Actual Separation Date, whichever is
         applicable, his Severance from Service Date will be deemed for purposes
         of this section to be his Disability Date. For purposes of this
         Section, if a Participant's Severance from Service Date is other than
         December 31, the following periods will be treated as a period of three
         consecutive calendar years:

         (a)      His months of Participation in the calendar year that includes
                  his Severance from Service Date; plus

                                       13

<PAGE>

         (b)      The two (or fewer) full calendar years of Participation prior
                  to his Severance from Service Date; plus

         (c)      From the calendar year immediately preceding the period
                  described in Subsection (b), the lesser of (1) the
                  Participant's months of Participation in that year, or (2) the
                  number of months equal to 12 minus the number of months
                  included pursuant to Subsection (a). A Participant's Earnings
                  will be deemed to have been earned ratably throughout the
                  period described in this Subsection (c).

1.51     "Highly Compensated Participant" means a highly compensated active
         Employee and a highly compensated former Employee. A highly compensated
         active Employee includes any Employee who performs service for the
         Employer during the Plan Year and who (a) is a 5% owner for that Plan
         Year or was a 5% owner for the prior Plan Year; or (b) for the
         preceding Plan Year received compensation from the Employer in excess
         of $80,000 (as adjusted pursuant to Code subsection 415(d)). The
         Employer does not elect to require that a highly compensated active
         Employee must be a member of the Employer's top-paid group for the
         preceding Plan Year.

         A highly compensated former Employee includes any Employee who
         terminated employment (or was deemed to have terminated employment)
         prior to the Plan Year, performs no service for the Employer during the
         Plan Year, and was a highly compensated active Employee for either the
         Plan Year during which he terminated employment or any Plan Year ending
         on or after the Employee's 55th birthday.

         The determination of who is a Highly Compensated Participant, including
         the determination of the number and identity of Employees in the
         top-paid group and the compensation that is considered, will be made in
         accordance with Code subsection 414(q).

                                       14

<PAGE>

1.52     "Holiday Premiums" means, with respect to a Non-Exempt Employee, the
         compensation received as a premium for services performed for the
         relevant period for working on a holiday recognized by the Employer
         pursuant to its applicable policy.

1.53     "Hour of Service" means, with respect to any Employee, any of the
         following:

         (a)      each hour for which he is paid, or entitled to payment, by an
                  Employer for the performance of duties for that Employer;

         (b)      each other hour for which back pay, irrespective of mitigation
                  of damages, has been either awarded to him or agreed to be
                  paid to him by an Employer;

         (c)      each other hour for which he is absent from his normal period
                  of employment with his Employer due to an approved military
                  leave, maternity leave, paternity leave, adoption leave,
                  worker's compensation leave, personal leave of six consecutive
                  months or less, or sick leave of six consecutive months or
                  less; or a total disability that qualifies him for benefits
                  under Cinergy's Long-Term Disability Plan; and

         (d)      each other hour for which he is paid, or entitled to payment,
                  by an Employer for a period of time during which he does not
                  perform any duties for that Employer (irrespective of whether
                  or not his employment relationship with that Employer has
                  terminated) due to vacation, holiday, illness, incapacity
                  (including disability), layoff, jury duty, witness duty,
                  military duty, or leave of absence.

                  In computing an Hour of Service, the Plan may use the
                  equivalencies set forth in paragraph (e) of 29 C.F.R.
                  Section.2530.200b-3. However, if different equivalencies are
                  used for different classifications of Employees, then those
                  classifications must be reasonable and consistently applied.
                  Each Hour of Service will be credited to the Employee for the
                  appropriate computation period in accordance with the

                                            15

<PAGE>

                  provisions of paragraphs (b) and (c) of 29 C.F.R.
                  Section.2530.200b-2, and each Hour of Service, when aggregated
                  for a particular computation period, will constitute the Hours
                  of Service credited to the Employee for that computation
                  period. However, no Employee will be credited under Subsection
                  (d) either with more than 501 Hours of Service on account of
                  any single continuous period during which the Employee
                  performs no duties for an Employer irrespective of whether or
                  not that period occurs in a single computation period, or with
                  an hour for which the Employee is paid, or entitled to
                  payment, by an Employer if that payment is made solely for
                  the purposes of either reimbursing the Employee for medical
                  or medically related expenses incurred by the Employee or
                  complying with applicable worker's compensation, unemployment
                  compensation, or disability insurance laws. However, the
                  crediting of Hours of Service for back pay awarded or agreed
                  to with respect to periods described in Subsection (d) of this
                  Section will be subject to the same limitations set forth in
                  the immediately preceding sentence with respect to Subsection
                  (d).

1.54     "Initial Separation Date" means, with respect to a Participant who is
         entitled to benefits under the provisions of Section 5.1 (Vesting
         Requirement), Section 5.2 (Severance from Service before Vesting), or
         Section 5.3 (Severance from Service after Vesting), the first day of
         the calendar month coincident with or following the Participant's
         initial Severance from Service Date.

1.55     "Insurance Company" means any insurance company holding any part of the
         Pension Fund.

1.56     "Intermittent Employee" means an Eligible Employee who performs
         services intermittently from time to time as needed by the Employer and
         as mutually agreed by the Employer and the Employee.

                                     16

<PAGE>

1.57     "Key Employee" means an Employee or former Employee of an Employer who,
         at any time during the determination period, is:

         (a)      an officer of an Employer having annual Section 415
                  Compensation from his Employer greater than 50 percent of the
                  amount in effect under Code subparagraph 415(b)(1)(A) for any
                  Plan Year;

         (b)      one of the ten Employees having annual Section 415
                  Compensation from his Employer of more than the limitation in
                  effect under Code subparagraph 415(c)(1)(A) and owning (or
                  considered as owning within the meaning of Code section 318)
                  the largest interests in the Employer.

         (c)      the owner (or considered as the owner within the meaning of
                  Code section 318) either of more than five percent of the
                  outstanding stock of Cinergy, or stock possessing more than
                  five percent of the total combined voting power of all stock
                  of Cinergy; or

         (d)      the recipient of at least $150,000 in annual Section 415
                  Compensation from the Employer and who owns (or is considered
                  as owning within the meaning of Code section 318) either more
                  than one percent of the outstanding stock of Cinergy or stock
                  possessing more than one percent of the total combined voting
                  power of all stock of Cinergy.

         However, no more than 50 Employees of an Employer will be deemed to be
         officers for any particular Plan Year. Also, the term Key Employee
         includes the beneficiaries of a Key Employee. For purposes of
         Subsection (b) above, if two Employees have the same interest in the
         Employer, the Employee having greater annual Earnings from his Employer
         will be treated as having a larger interest. The determination of who
         is a Key Employee will be made in accordance with Code paragraph
         416(i)(1).

                                     17

<PAGE>

1.58     "Leased Employee" means any person who performs services for another
         person, the "recipient," but who is not an employee of the recipient,
         if (a) the services are provided pursuant to an agreement between the
         recipient and any other person, (b) the person has performed the
         services for the recipient (or for the recipient and related persons)
         on a substantially full-time basis for a period of at least one year,
         and (c) the services are performed under the primary direction and
         control of the recipient. A Leased Employee will not be considered an
         employee of the recipient if:

         (a)      that employee is covered by a money purchase pension plan
                  providing:

                  (1)      a non-integrated employer contribution rate of at
                           least 10 percent of compensation, as defined in Code
                           paragraph 415(c)(3), but including amounts
                           contributed pursuant to a salary reduction agreement
                           that are excludable from the Employee's gross income
                           under Code section 125, Code paragraph 402(a)(8), or
                           Code subsections 402(h) or 403(b);

                  (2)      immediate participation;

                  (3)      full and immediate vesting; and

         (b)      leased employees do not constitute more than 20 percent of the
                  recipient's non-highly compensated work force.

1.59     "Long-Term Performance Awards" means, with respect to an Employee, the
         cash or stock-based award received by the Employee pursuant to the
         provisions of an Employer's long-term bonus or incentive pay plan or
         program, including, but without limitation because of enumeration, the
         Cinergy Performance Shares Plan or the Cinergy 1996 Long-Term Incentive
         Compensation Plan.

                                      18

<PAGE>

1.60     "Medical/Dental Benefits" means the benefits specified and payable
         under Section 9.8 (Medical/Dental Benefits) from the Medical/Dental
         Benefits Account.

1.61     "Medical/Dental Benefits Account" means the separate account
         established pursuant to Article 9 (Retiree Medical/Dental Benefits) for
         contributions to fund benefits payable under Article 9 (Retiree
         Medical/Dental Benefits).

1.62     "Medical/Dental Plan" means any plan or program that is established by
         the Employer to provide medical or dental insurance coverage or medical
         or dental expense reimbursements to Eligible Individuals.

1.63     "MRP" means The Cincinnati Gas & Electric Company Management Retirement
         Plan, as in effect immediately prior to January 1, 1998.

1.64     "Non-Exempt Employee" means an Eligible Employee whose pay is
         customarily computed on an hourly, weekly, or bi-weekly basis, and
         whose employment is subject to FLSA overtime and record keeping
         provisions.

1.65     "Nonforfeitable" means, with respect to a Participant's claim for
         benefits under the Plan, that the claim is unconditional, legally
         enforceable, and not subject to divestment except in accordance with
         the Plan's specific provisions, including, but without limitation
         because of enumeration, the provisions of Section 15.3 (Sufficiency of
         Pension Fund).

1.66     "Normal Retirement Date" means, with respect to each Participant, the
         first day of the calendar month coincident with or following his 65th
         birthday.

1.67     "Option Effective Date" means a Participant's Actual Separation Date,
         unless further extended with respect to a Participant making a timely
         election during the applicable election period, in which case the
         Option Effective Date will be the first day of the

                                    19

<PAGE>

         calendar month coincident with or following the last day of the
         applicable election period, provided he has timely elected the option
         on or before that date.

1.68     "Overtime Pay" means, with respect to an Employee, the compensation
         received as remuneration consistent with the requirements of the FLSA,
         or for services performed for the relevant period for hours worked
         beyond the Employee's regularly scheduled work hours pursuant to the
         Employer's applicable policy.

1.69     "Participant" means any Eligible Employee who has met the eligibility
         requirements set forth in Article 3 (Eligibility and Participation) and
         for whom benefits are to be provided under the Plan.

1.70     "Participation" means, with respect to an Eligible Employee, the period
         of time during which he is treated as a Participant in the Plan, the
         length of which will be determined as follows:

         (a)      A Regular Employee will be credited with Participation for the
                  period of time beginning with the later of (1) January 1,
                  1998, or (2) his Employment Commencement Date and ending on
                  his Severance from Service Date.

         (b)      A Regular Employee will be credited with Participation for any
                  Period of Credited Severance during which he is a Participant
                  or former Participant.

         (c)      An Intermittent Employee or Temporary Employee who has become
                  a Participant pursuant to Section 3.2 (Intermittent Employees
                  and Temporary Employees) will be credited, retroactively if
                  necessary, with Participation beginning on the later of (1)
                  January 1, 1998, or (2) his Employment Commencement Date. An
                  Intermittent Employee or Temporary Employee will be credited
                  with one year of Participation for each Plan Year in which he
                  completes at least 1,000 Hours of Service. An Intermittent
                  Employee or Temporary Employee will not be credited

                                          20

<PAGE>

                  with any Participation for any Plan Year in which he completes
                  less than 1,000 Hours of Service.

         (d)      If an Intermittent or Temporary Employee becomes a Regular
                  Employee on a date other than the first day of a Plan Year,
                  all of his Hours of Service completed during the Plan Year in
                  which the change in employment status occurred will be
                  counted. If the Employee completes at least 1,000 Hours of
                  Service during that Plan Year, he will be credited with one
                  year of Participation for the Plan Year in which the change
                  occurred. If the Employee does not complete at least 1,000
                  Hours of Service during the Plan Year in which the change
                  occurred, he will be credited with one month of Participation
                  for each calendar month during that Plan Year in which he is
                  credited with at least one Hour of Service as a Regular
                  Employee.

         (e)      Notwithstanding any other provision of this Plan to the
                  contrary, an Eligible Employee who accrued "years of
                  accredited service" (as defined in the MRP and the RIP) under
                  the MRP or the RIP or "years of participation" (as defined in
                  the PSI Plan) under the PSI Plan will be credited with years
                  of Participation under this Plan for the years of accredited
                  service credited to him under the MRP or the RIP and the years
                  of participation credited to him under the PSI Plan before
                  January 1, 1998.

         (f)      In determining an Eligible Employee's total Participation for
                  purposes of the Plan, all periods of service that are credited
                  to the Employee under Subsections (a) through (e) above will
                  be aggregated. In no event will an Employee be credited more
                  than once for the same period of Participation. For purposes
                  of determining a Regular Employee's total Participation, the
                  Regular Employee will be credited with one month of
                  Participation for each calendar month in which he is a
                  Participant in the Plan and is credited with at least one Hour
                  of Service. A Regular Employee will be credited with one year
                  of Participation for each 12

                                          21

<PAGE>

                  months of Participation with which he is credited pursuant to
                  the preceding sentence.

         (g)      Notwithstanding Subsection (f), if an Eligible Employee is a
                  Reemployed Retiree or a Reemployed Terminated Vested
                  Participant, and his "years of participation" (as defined in
                  the PSI Plan) under the PSI Plan or his "years of accredited
                  service" (as defined in the MRP or RIP) under the MRP or RIP
                  were subject to a maximum under the pension formula applicable
                  to the Eligible Employee at the time he incurred a Severance
                  from Service, that Eligible Employee's total Participation
                  when he again incurs a Severance from Service under the Plan
                  will not exceed the sum of his maximum pre-1998 years and the
                  Eligible Employee's years of Participation during his period
                  of reemployment.

1.71     "Pension Fund" or "Fund" means the fund established in consequence of
         and for the purposes of the Plan to provide the benefits under the
         Plan, including all funds held in all trusts and group annuity
         contracts that are being used as funding media for the Plan.

1.72     "Performance Lump Sum Pay" means, with respect to an Exempt Employee or
         a Non-Exempt Employee, the compensation received as remuneration based
         upon the Employee's performance when the Employer's applicable merit
         pay policy would otherwise preclude a performance based increase.

1.73     "Period of Credited Severance" means, with respect to each Regular
         Employee who has incurred a Severance from Service, and who, within 12
         Months of his Severance from Service Date, performs an Hour of Service,
         the Period of Severance commencing on the Regular Employee's Severance
         from Service Date and ending on the date thereafter upon which he first
         performs an Hour of Service. In the case of a Regular Employee who has
         incurred a Severance from Service that occurs during an Absence from
         Service by reason of a maternity or paternity absence as defined in
         Subsection 1.94(b), the period between

                                    22

<PAGE>

         the first and second anniversaries of the first day of absence will
         not be a Period of Credited Severance.

1.74     "Period of Severance" means, with respect to each Regular Employee, the
         period of time commencing on his Severance from Service Date and ending
         on the date thereafter upon which he first performs an Hour of Service.

1.75     "Permissive Aggregation Group" means an Aggregation Group that may
         include any other plan not required to be included in the Required
         Aggregation Group, provided the resulting group, taken as a whole,
         would continue to satisfy the provisions of Code paragraph 401(a)(4)
         and Code section 410.

1.76     "Plan" means the pension plan known as the "Cinergy Corp. Non-Union
         Employees' Pension Plan," as amended, from time to time. As effective
         January 1, 1998, this document sets forth the Plan.

1.77     "Plan Year" means the calendar year.

1.78     "Present Value of Accrued Benefits" means, with respect to Top-Heavy
         Plan status, the sum of:

         (a)      the present value of the Plan's accrued benefits using the
                  1983 Group Annuity Mortality Tables (separate tables for males
                  and females) and 7-1/2% interest, and

         (b)      any Plan distributions made within the Plan Year that includes
                  the Determination Date or within the four preceding Plan
                  Years. However, in the case of distributions made after the
                  Valuation Date and prior to the Determination Date, the
                  distributions are not included as distributions for Top-Heavy
                  Plan purposes to

                                         23

<PAGE>

                  the extent that the distributions are already included in
                  the Participant's present value of accrued benefits as of the
                  Valuation Date.

1.79     "Projected Annual Benefit" means, with respect to any Participant
         participating in a Qualified Defined Benefit Plan maintained by an
         Employer or an Affiliate, the annual straight life annuity benefit to
         which the Participant would be entitled under that Qualified Defined
         Benefit Plan based upon the following assumptions:

         (a)      the Participant will continue as an employee of an Employer
                  until reaching the Participant's normal retirement age under
                  the plan (or the Participant's current age if that is later);

         (b)      the Participant's compensation used to determine benefits
                  under the plan for the calendar year under consideration will
                  remain the same until the date the Participant attains the age
                  described in Paragraph (a); and

         (c)      all other relevant factors used to determine benefits under
                  the plan for the calendar year under consideration will remain
                  constant for all future calendar years.

1.80     "PSI Plan" means the PSI Energy, Inc. Pension Plan, as in effect
         immediately prior to January 1, 1998.

1.81     "Qualified Defined Benefit Plan" means any qualified defined benefit
         plan as defined in Code subsections 414(j) and 415(k).

1.82     "Qualified Defined Contribution Plan" means any qualified defined
         contribution plan as defined in Code subsections 414(i) and 415(k).

1.83     "Qualified Domestic Relations Order" means a qualified domestic
         relations order as defined in Code subsection 414(p).

                                     24

<PAGE>

1.84     "Reduced Primary Social Security Benefit" means the reduced amount of
         primary federal old age insurance benefit estimated by the Committee
         that is, or would be, payable or estimated to become payable to a
         Participant at his earliest eligibility date. The estimate is based on
         the Social Security Act as in effect at the Participant's Option
         Effective Date. If a Participant supplies documentation from the Social
         Security Administration of his or her actual Reduced Primary Social
         Security Benefit at least 60 days before his or her Option Effective
         Date, that amount will be used in lieu of the estimate referred to
         above. A Reduced Primary Social Security Benefit calculated using
         actual documentation will not be recalculated.

1.85     "Reemployed Retiree" means a Participant, other than a Terminated
         Vested Participant, who is reemployed by an Employer after his Initial
         Separation Date or an Additional Separation Date.

1.86     "Reemployed Terminated Vested Participant" means a Terminated Vested
         Participant who is reemployed by an Employer after his Initial
         Separation Date or an Additional Separation Date.

1.87     "Reemployment Commencement Date" means, with respect to an Eligible
         Employee who incurs a Severance from Service and is later reemployed by
         an Employer, the date upon which the Eligible Employee first performs
         an Hour of Service after his reemployment.

1.88     "Regular Employee" means an Eligible Employee who is not an
         Intermittent Employee or a Temporary Employee.

1.89     "Required Aggregation Group" means an Aggregation Group consisting of
         each plan of an Employer, including any terminated plan, in which a Key
         Employee has been a Participant in the Plan Year containing the
         Determination Date or any of the four preceding Plan Years, and each
         other plan of the Employer that enables any plan in which

                                  25

<PAGE>

         a Key Employee participates to meet the requirements of Code subsection
         401(a) or Code section 410.

1.90     "Retired Participant" means a former Participant, other than a
         Terminated Vested Participant, while alive on and after his Actual
         Separation Date.

1.91     "RIP" means The Cincinnati Gas & Electric Company Retirement Income
         Plan, as in effect immediately prior to January 1, 1998.

1.92     "Sabbatical Vacation Pay" means, with respect to an Employee, the
         compensation received as remuneration for the weeks of accrued vacation
         accumulated pursuant to the Employer's applicable policy for the
         purpose of taking an extended vacation beyond the number of weeks of
         vacation to which the Employee would normally be entitled.

1.93     "Section 415 Compensation" means an Eligible Employee's earned income,
         wages, salaries, and fees for professional services, and other amounts
         received for personal services actually rendered in the course of
         employment with the Employer (including, but not limited to,
         commissions paid salesmen, compensation for services on the basis of a
         percentage of profits, commissions on insurance premiums, tips and
         bonuses) and, except as provided in the following sentence, excluding
         the following: (a) Employer contributions to a plan of deferred
         compensation that are not included in the Employee's gross income for
         the taxable year in which contributed or any distributions from a plan
         of deferred compensation; (b) amounts realized from the exercise of a
         nonqualified stock option, or when restricted stock (or property) held
         by the Employee either becomes freely transferable or is no longer
         subject to a substantial risk of forfeiture; and (c) amounts realized
         from the sale, exchange, or other disposition of stock acquired under a
         qualified stock option. Notwithstanding the foregoing, Section 415
         Compensation will include any elective deferral as defined in Code
         paragraph 402(g)(3) and amounts contributed by an Employer pursuant to
         a salary reduction agreement that are excludable from the Employee's
         gross income under Code section 125 or 457.

                                    26

<PAGE>

1.94     "Securities Exchange Act" means the Securities Exchange Act of 1934, as
         amended from time to time, and interpretive rulings and regulations.

1.95     "Service" means, with respect to an Eligible Employee, the period of
         time during which the employment relationship exists between the
         Eligible Employee and the Employer, the length of which is determined
         as follows:

         (a)      A Regular Employee will be credited with Service for the
                  period of time beginning with his Employment Commencement Date
                  and ending on his Severance from Service Date.

         (b)      A Regular Employee will be credited with Service for each
                  Period of Credited Severance.

         (c)      An Intermittent Employee or Temporary Employee who has
                  completed one Year of Eligibility Service will be credited,
                  retroactively if necessary, with Service beginning on his
                  Employment Commencement Date. An Intermittent Employee or
                  Temporary Employee will be credited with one year of Service
                  for each Plan Year in which he completes at least 1,000 Hours
                  of Service. An Intermittent Employee or Temporary Employee
                  will not be credited with any Service for any Plan Year in
                  which he completes less than 1,000 Hours of Service.

         (d)      If an Intermittent or Temporary Employee becomes a Regular
                  Employee on a date other than the first day of a Plan Year,
                  all of his Hours of Service completed during the Plan Year in
                  which the change in employment status occurred will be
                  counted. If the Employee completes at least 1,000 Hours of
                  Service during that Plan Year, he will be credited with one
                  year of Service for the Plan Year in which the change
                  occurred. If the Employee does not complete at least 1,000
                  Hours of Service during the Plan Year in which the change
                  occurred, he will be credited

                                       27

<PAGE>

                  with one month of Service for each calendar month during
                  that Plan Year in which he is credited with at least one
                  Hour of Service as a Regular Employee.

         (e)      An Eligible Employee will be credited with Service for any
                  period of Service with an Affiliate after he has reached age
                  18, which will be determined as if he had been employed by the
                  Employer during that period.

         (f)      Notwithstanding any other provision of the Plan to the
                  contrary, any Eligible Employee who accrued "years of service"
                  (as defined in the PSI Plan) under the PSI Plan or "years of
                  vesting service" (as defined in the MRP or RIP) under the MRP
                  or the RIP will be credited with Service for the years of
                  service credited to him under the PSI Plan and the years of
                  vesting service credited to him under the MRP or RIP before
                  January 1, 1998.

         (g)      In determining an Eligible Employee's total Service for
                  purposes of the Plan, all periods of Service that are credited
                  to the Employee under Subsections (a) through (f) above will
                  be aggregated. In no event will an Employee receive credit
                  more than once for the same period of Service. For purposes of
                  determining a Regular Employee's total Service, the Regular
                  Employee will be credited with one month of Service for each
                  calendar month in which he is credited with at least one Hour
                  of Service. A Regular Employee will be credited with one year
                  of Service for each 12 months of Service with which he is
                  credited pursuant to the preceding sentence.

1.96     "Severance from Service" means, with respect to an Employee:

         (a)      the date of termination of his employment relationship with
                  his Employer by reason of a quit, resignation, discharge,
                  retirement, death, or layoff of the Employee for an indefinite
                  period of time made without any expectation on the part of the
                  Employer at the time of layoff to recall the Employee, for
                  employment

                                            28

<PAGE>

                  with the Employer as an Employee within 12 months from the
                  date of the commencement of the layoff; or

         (b)      the first anniversary of the first date of the Employee's
                  Absence from Service, or, if later, the expiration of an
                  Absence from Service. Notwithstanding the preceding sentence,
                  if an Employee has an Absence from Service of more than one
                  year by reason of a maternity or paternity absence, the
                  Employee's Severance from Service occurs on the second
                  anniversary of that absence. For purposes of this Subsection,
                  an Absence from Service for maternity or paternity reasons
                  means an absence (1) by reason of the pregnancy of the
                  individual, (2) by reason of the birth of a child of that
                  individual, (3) by reason of the placement of a child with the
                  individual in connection with the adoption of the child by
                  that individual, or (4) for purposes of caring for the child
                  for a period beginning immediately following its birth or
                  placement.

         For purposes of this Subsection, the term "Employer" includes all
         Affiliates, and an Employee or former Employee will not be treated as
         having incurred a Severance from Service until the employment
         relationship between the Employee and all Employers and Affiliates is
         terminated.

1.97     "Severance from Service Date" means, with respect to each Employee, the
         date of his Severance from Service.

1.98     "Shift Premiums" means, with respect to a Non-Exempt Employee, the
         compensation received as a premium for services performed for the
         relevant period for working a shift other than the Employer's regular
         day shift pursuant to the Employer's applicable policy.

1.99     "Social Security Act" means the federal Social Security Act, 42
         U.S.C. Section .301, ET SEQ., as amended from time to time, and
         interpretive rulings and regulations.

                                      29

<PAGE>

1.100    "Social Security Retirement Age" means respectively (a) age 65 for a
         Participant born before January 1, 1938; (b) age 66 for a Participant
         born after December 31, 1937, but before January 1, 1955; and (c) age
         67 for a Participant born after December 31, 1954.

1.101    "Spouse" means, with respect to any Participant, the Participant's
         lawfully married spouse, if any, on the applicable date. The Plan will
         not recognize common law marriages or similar arrangements unless
         required to do so by federal law. A former Spouse will also be
         considered a Spouse to the extent provided under a Qualified Domestic
         Relations Order.

1.102    "Super Top-Heavy Plan" means a Qualified Defined Benefit Plan or a
         Qualified Defined Contribution Plan described in Section 23.2
         (Top-Heavy Determination).

1.103    "Temporary Employee" means an Eligible Employee who is regularly
         scheduled to work less than 20 hours per week or to work on a non-fixed
         schedule.

1.104    "Terminated Vested Participant" means a Participant who is entitled to
         benefits under the provisions of Section 5.3 (Severance from Service
         After Vesting).

1.105    "Top-Heavy Group" means an Aggregation Group described in Section 23.2
         (Top-Heavy Determination).

1.106    "Top-Heavy Plan" means a Qualified Defined Benefit Plan or a Qualified
         Defined Contribution Plan described in Section 23.2 (Top-Heavy
         Determination).

1.107    "Top-Heavy Plan Year" means a particular Plan Year for which the Plan
         is a Top-Heavy Plan.

1.108    "Trust Fund" means the trust established by the Employer to fund the
         Plan.

                                      30

<PAGE>

1.109    "Trustee" means the person or entity designated by Cinergy to act as
         trustee of any trust forming a part of the Pension Fund.

1.110    "Valuation Date" means, in connection with Article 23 (Provisions
         Relating to Top-Heavy Plans), the most recent valuation date for
         minimum funding purposes under the Plan that falls within or ends with
         the 12 month period ending on the Determination Date.

1.111    "Vesting Requirement" means, with respect to each Participant, the
         requirements for the vesting of his accrued benefits under the Plan.

1.112    "Work Schedule Recognition Pay" means, with respect to an Exempt
         Employee, the compensation received as remuneration for services
         performed for the relevant period for working a shift other than the
         Employer's regular day shift pursuant to the Employer's applicable
         policy.

1.113    "Year of Eligibility Service" means, with respect to an Intermittent
         Employee or a Temporary Employee, a measuring year during which he
         completes at least 1,000 Hours of Service. The first measuring year
         begins on the later of the Employee's (a) Employment Commencement Date
         (or, with respect to any periods after a Severance from Service, his
         Reemployment Commencement Date) or (b) his 18th birthday, and
         subsequent measuring years will be the Plan Year, beginning with the
         first Plan Year that begins after the Employee's Employment
         Commencement date (or, if applicable, Reemployment Commencement Date).
         If an Intermittent Employee or a Temporary Employee has a Severance
         from Service during a measuring year and has a subsequent Reemployment
         Commencement Date during that measuring year, then: (a) for purposes of
         determining whether the Employee accumulated a Year of Eligibility
         Service during the measuring year, the total Hours of Service
         accumulated by the Employee during that measuring year both before and
         after the Severance from Service will be aggregated, and (b) for
         purposes of determining whether the Employee accumulated a Year of
         Eligibility Service during the measuring year commencing on his
         Reemployment Commencement

                                      31

<PAGE>

         Date, the total Hours of Service accumulated by the Employee during
         that subsequent measuring year will be aggregated.

The uses of singular and masculine words are for practical purposes only and
will be deemed to include the plural and feminine, respectively, unless the
context plainly indicates a distinction. Certain other definitions, as required,
appear in the following Articles of the Plan.

                                    ARTICLE 2

                             EFFECTIVE DATE OF PLAN

The original effective date of the MRP was January 1, 1990. The effective date
of this Plan restatement is January 1, 1998, as to Cinergy, and will be
effective with respect to any other Employer as of the date that Employer elects
to participate in the Plan pursuant to Section 21.1 (Adoption of Plan).

This Plan restatement applies only to Eligible Employees who are credited with
at least one Hour of Service on or after January 1, 1998. This Plan restatement
will not affect the rights of former Eligible Employees (and their
Beneficiaries) who retired, died, or otherwise terminated their employment with
an Employer prior to January 1, 1998. The rights, if any, of those former
Eligible Employees (and their Beneficiaries), and the amounts of their benefits,
if any, will be governed by the provisions of the PSI Plan, the RIP or the MRP,
whichever is applicable.

                                    ARTICLE 3

                          ELIGIBILITY AND PARTICIPATION

3.1      DATE OF PARTICIPATION

         Each Employee who is an Eligible Employee on January 1, 1998, and who
         was participating as of December 31, 1997, in either the MRP, the RIP,
         or the PSI Plan, will become a Participant as of January 1, 1998.
         Except as provided in Section 3.2

                                        32

<PAGE>

         (Intermittent Employees and Temporary Employees), each other Eligible
         Employee will automatically become a Participant on the latest of
         January 1, 1998, his Employment Commencement Date, or the date he
         reaches age 18. An Eligible Employee who becomes a Participant,
         subsequently incurs a Severance from Service, and is later reemployed
         by an Employer will again become a Participant on his Reemployment
         Commencement Date.


3.2      INTERMITTENT EMPLOYEES AND TEMPORARY EMPLOYEES

         Notwithstanding the provisions in Section 3.1 (Date of Participation),
         an Intermittent Employee or a Temporary Employee who was not
         participating in either the MRP, the RIP, or the PSI Plan as of
         December 31, 1997, will not become a Participant until he has completed
         one Year of Eligibility Service. Upon completion of one Year of
         Eligibility Service, an Intermittent or Temporary Employee will become
         a Participant retroactive to the later of January 1, 1998, or his
         Employment Commencement Date.

3.3      LEASED EMPLOYEES

         A Leased Employee will be excluded from participation in the Plan.
         However, if a Leased Employee is subsequently employed by an Employer
         as an Eligible Employee, his time as a Leased Employee of an Employer
         will be considered for purposes of determining eligibility under this
         Article and vesting under Article 5 (Severance from Service --
         Vesting).

3.4      TRANSFERS OF EMPLOYMENT

         If a Participant is transferred from one Employer to another or from an
         Employer to an Affiliate, he will continue to participate in the Plan
         until an event occurs that would have terminated his participation had
         he continued in the service of an Employer, except that payments
         received by a Participant from any Affiliate that is not an Employer
         will not be

                                    33

<PAGE>

         treated as Earnings for purposes of determining the amount of
         retirement benefits to which the Participant will be entitled. Any
         period of employment with an Affiliate that is not an Employer will be
         taken into account for purposes of determining when an Employee is
         eligible to participate in the Plan pursuant to Section 3.2
         (Intermittent Employees and Temporary Employees) and for purposes of
         determining when a Participant has satisfied the Vesting Requirement.

         If a Participant is transferred from an Employer to an Affiliate that
         has not elected to participate in the Plan pursuant to Section 21.1
         (Adoption of Plan), the Participant's accrued benefit under the Plan as
         of the date of the transfer will be preserved. The Participant's
         service after the transfer will not be considered in determining the
         Participant's years of Participation, but will be considered in
         determining the Participant's years of Service.

3.5      TRANSFERS OF PARTICIPANTS AND PLAN ASSETS TO AND FROM THE CINERGY CORP.
         UNION EMPLOYEES' RETIREMENT INCOME PLAN AND CINERGY CORP. UNION
         EMPLOYEES' PENSION PLAN.

         (a)      If a Participant in the Plan remains an Employee but becomes
                  ineligible to participate in the Plan, he will become a
                  participant in the Cinergy Corp. Union Employees' Retirement
                  Income Plan or the Cinergy Corp. Union Employees' Pension
                  Plan, if he is an "eligible employee" as defined in either of
                  those plans, as of the first day of the month during which his
                  change in Employee status become effective.

         (b)      If a participant in the Cinergy Corp. Union Employees'
                  Retirement Income Plan or the Cinergy Corp. Union Employees'
                  Pension Plan remains an Employee but becomes ineligible to
                  participate in his current plan, he will become a Participant
                  in the Plan, if he is an Eligible Employee, as of the first
                  day of the month during which his change in Employee status
                  becomes effective.

                                        34

<PAGE>
         (c)      A transfer of assets between the Plan and the Cinergy Corp.
                  Union Employees' Retirement Income Plan or the Cinergy Corp.
                  Union Employees' Pension Plan will follow the requirements of
                  Code subsection 414(1). The value of the benefits to be
                  transferred will be based upon the Plan's actuarial valuation
                  assumptions at the time of the transfer. The actual transfer
                  of assets will occur as soon as administratively practicable
                  after the change in the Participant's Employee status.

         (d)      A Participant who has earned years and/or partial years of
                  "participation" under the Cinergy Corp. Union Employees'
                  Retirement Income Plan or the Cinergy Corp. Union Employees'
                  Pension Plan, and who then becomes a Participant in this Plan,
                  will be credited under this Plan with his total years of
                  "participation" earned under the Cinergy Corp. Union
                  Employees' Retirement Income Plan or the Cinergy Corp. Union
                  Employees' Pension Plan as if they were earned under this
                  Plan. A Participant will not be credited with more years of
                  Participation than he would have earned if the total of all
                  his years of Participation under the Plan and all his years of
                  "participation" under the Cinergy Corp. Union Employees'
                  Retirement Income Plan and the Cinergy Corp. Union Employees'
                  Pension Plan had been earned solely as a Participant of this
                  Plan. The benefit paid to a Participant under this Plan will
                  never be less than the benefit the Participant earned in the
                  Cinergy Corp. Employees' Retirement Income Plan and/or the
                  Cinergy Corp. Union Employees' Pension Plan prior to his
                  change in Employee status.

                                          35

<PAGE>

                                    ARTICLE 4

                           AMOUNT OF LIFE-ONLY PENSION

4.1      NORMAL RETIREMENT PENSION FORMULA

         Except as otherwise expressly provided in this Article, a Participant
         who retires on or after his Normal Retirement Date will be entitled to
         a Nonforfeitable Annual Pension under this Plan equal to the sum of (a)
         plus (b), where (a) is equal to:

                  (1)      1.1 percent of the Participant's Highest Average
                           Earnings plus

                  (2)      0.5 percent of the amount by which his Highest
                           Average Earnings exceed his applicable Covered
                           Compensation, multiplied by the number of his years
                           of Participation not in excess of 35;

and (b) is equal to 1.4 percent of the Participant's Highest Average Earnings,
multiplied by the number of his years of Participation in excess of 35.

4.2      NORMAL RETIREMENT BENEFITS FOR PARTICIPANTS IN THE PSI PLAN

         The normal retirement Nonforfeitable Annual Pension of a Participant
         who was a participant in the PSI Plan as of December 31, 1997, will be
         the greater of (a) or (b), where (a) is the Participant's Annual
         Pension calculated under Section 4.1 (Normal Retirement Pension
         Formula) and (b) is the Participant's annual accrued benefit calculated
         under the PSI Plan as of December 31, 1997. The formulas used to
         calculate a Participant's annual accrued benefit under the PSI Plan as
         in effect on December 31, 1997, are set forth in Addendum A to this
         Plan.

                                       36

<PAGE>

4.3      NORMAL RETIREMENT BENEFITS FOR PARTICIPANTS IN THE MRP OR RIP

         The normal retirement Nonforfeitable Annual Pension of a Participant
         who was a participant in the MRP or RIP as of December 31, 1997, will
         be the greater of (a) or (b), where (a) is the Participant's Annual
         Pension calculated under Section 4.1 (Normal Retirement Pension
         Formula) and (b) is the Participant's annual accrued benefit calculated
         under the MRP or RIP as of December 31, 1997. The formulas used to
         calculate a Participant's annual accrued benefit under the MRP or RIP
         as in effect on December 31, 1997, are set forth in Addendum B to this
         Plan.

4.4      GENERAL METHOD OF COMPUTING ANNUAL PENSION FOR RETIREMENT AT EARLY
         RETIREMENT DATE

         (a)      Subject to the following provisions of this Section, a
                  Participant who retires on an Early Retirement Date, will be
                  entitled to a Nonforfeitable Annual Pension computed under
                  Section 4.1 (Normal Retirement Pension Formula). The benefits
                  will begin on the Employee's Normal Retirement Date, or, if
                  the Employee so elects, at an earlier date on or after his
                  Early Retirement Date. If the Employee elects to have the
                  benefit begin before his 62nd birthday, the amount of the
                  Employee's Nonforfeitable Annual Pension will be multiplied by
                  the appropriate early payment factor as obtained from the
                  following table:

                                       37

<PAGE>

<TABLE>
<CAPTION>
       EARLY PAYMENT     EARLY PAYMENT     EARLY PAYMENT     EARLY PAYMENT    EARLY PAYMENT     EARLY PAYMENT
          PERIOD             FACTOR            PERIOD           FACTOR            PERIOD           FACTOR
       -------------     -------------     -------------     -------------    -------------     -------------
        YR.      MO.                        YR.      MO.                       YR.      MO.
        --       --                         --       --                        --       --
         <S>     <C>              <C>       <C>      <C>             <C>       <C>      <C>             <C>
         0        0               1.0000     4        0              0.7333     8        0              0.5667
         0        1               0.9944     4        1              0.7278     8        1              0.5639
         0        2               0.9889     4        2              0.7222     8        2              0.5611
         0        3               0.9833     4        3              0.7167     8        3              0.5584
         0        4               0.9778     4        4              0.7111     8        4              0.5556
         0        5               0.9722     4        5              0.7056     8        5              0.5528
         0        6               0.9667     4        6              0.7000     8        6              0.5500
         0        7               0.9611     4        7              0.6944     8        7              0.5473
         0        8               0.9556     4        8              0.6889     8        8              0.5445
         0        9               0.9500     4        9              0.6833     8        9              0.5417
         0        10              0.9444     4       10              0.6778     8       10              0.5389
         0        11              0.9389     4       11              0.6722     8       11              0.5361
         1        0               0.9333     5        0              0.6667     9        0              0.5334
         1        1               0.9278     5        1              0.6639     9        1              0.5300
         1        2               0.9222     5        2              0.6611     9        2              0.5265
         1        3               0.9167     5        3              0.6584     9        3              0.5231
         1        4               0.9111     5        4              0.6556     9        4              0.5196
         1        5               0.9056     5        5              0.6528     9        5              0.5162
         1        6               0.9000     5        6              0.6500     9        6              0.5127
         1        7               0.8944     5        7              0.6473     9        7              0.5093
         1        8               0.8889     5        8              0.6445     9        8              0.5059
         1        9               0.8833     5        9              0.6417     9        9              0.5024
         1        10              0.8778     5       10              0.6389     9       10              0.4990
         1        11              0.8722     5       11              0.6361     9       11              0.4955
         2        0               0.8667     6        0              0.6334    10        0              0.4921
         2        1               0.8611     6        1              0.6306    10        1              0.4889
         2        2               0.8556     6        2              0.6278    10        2              0.4858
         2        3               0.8500     6        3              0.6250    10        3              0.4826
         2        4               0.8444     6        4              0.6223    10        4              0.4795
         2        5               0.8389     6        5              0.6195    10        5              0.4763
         2        6               0.8333     6        6              0.6167    10        6              0.4732
         2        7               0.8278     6        7              0.6139    10        7              0.4700
         2        8               0.8222     6        8              0.6111    10        8              0.4668
         2        9               0.8167     6        9              0.6084    10        9              0.4637
         2        10              0.8111     6       10              0.6056    10       10              0.4605
         2        11              0.8056     6       11              0.6028    10       11              0.4574
         3        0               0.8000     7        0              0.6000    11        0              0.4542
         3        1               0.7944     7        1              0.5973    11        1              0.4513
         3        2               0.7889     7        2              0.5945    11        2              0.4485
         3        3               0.7833     7        3              0.5917    11        3              0.4456
         3        4               0.7778     7        4              0.5889    11        4              0.4427
         3        5               0.7722     7        5              0.5861    11        5              0.4398
         3        6               0.7667     7        6              0.5834    11        6              0.4370
         3        7               0.7611     7        7              0.5806    11        7              0.4341
         3        8               0.7556     7        8              0.5778    11        8              0.4312
         3        9               0.7500     7        9              0.5750    11        9              0.4283
         3        10              0.7444     7       10              0.5723    11       10              0.4255
         3        11              0.7389     7       11              0.5695    11       11              0.4226
                                                                               12        0              0.4197
</TABLE>
                                             38

<PAGE>

                  In using the above table, the order of required steps is as
                  follows:

                  (1)      determine the Participant's "early payment period,"
                           which is the number of whole calendar months by which
                           the actual commencement of his pension payments
                           precedes the first day of the calendar month
                           coincident with or following his 62nd birthday;

                  (2)      use the early payment period as determined in Step
                           (1) to identify the applicable early payment factor;
                           and

                  (3)      multiply the applicable early payment factor times
                           the amount of the Participant's Annual Pension
                           determined under Section 4.1 (Normal Retirement
                           Pension Formula).

         (b)      Notwithstanding any other provision of this Section except
                  Subsection (e), the early retirement Nonforfeitable Annual
                  Pension payable to a Participant who (1) was a participant in
                  the PSI Plan as of December 31, 1997, and (2) became a
                  participant in the PSI Plan prior to May 1, 1970, will be
                  computed under Section 4.2 (Normal Retirement Benefits for
                  Participants in the PSI Plan) and will be reduced by
                  multiplying the amount of the Participant's Nonforfeitable
                  Annual Pension by the early payment factor described in
                  Subsection (a); provided, however, that his early retirement
                  Nonforfeitable Annual Pension will not be less than the
                  product of:

                  (A)      the amount computed under PSI Pension Formula 3 (as
                           described in Addendum A) as of the following date:

                           (i)      December 31, 1989, with respect to an
                                    Employee who is not a Highly Compensated
                                    Participant; or

                                      39

<PAGE>

                           (ii)     December 31, 1988, with respect to a Highly
                                    Compensated Participant; and

                  (B)      the early payment factor determined as described in
                           Subsection (a), except that the early payment period
                           will be the number of whole calendar months by which
                           the commencement of the Participant's pension
                           payments precedes the first day of the calendar month
                           coincident with or following his 60th birthday.

         (c)      Notwithstanding any other provision of this Section except
                  Subsection (e), the early retirement Nonforfeitable Annual
                  Pension payable to a Participant who (1) was a participant in
                  the PSI Plan as of December 31, 1997, and (2) became a
                  participant in the PSI Plan on or after May 1, 1970, will be
                  computed under Section 4.2 (Normal Retirement Benefits for
                  Participants in the PSI Plan) and will be reduced by
                  multiplying the amount of the Participant's Nonforfeitable
                  Annual Pension by the early payment factor described in
                  Subsection (a); provided, however, that his early retirement
                  Nonforfeitable Annual Pension will not be less than the
                  product of:

                  (A)      the amount computed under PSI Pension Formula 2 (as
                           described in Addendum A) as of the following date:

                           (i)      December 31, 1989, with respect to an
                                    Employee who is not a Highly Compensated
                                    Participant; or

                           (ii)     December 31, 1988, with respect to a Highly
                                    Compensated Participant; and

                  (B)      the early payment factor determined as described in
                           Subsection (a).

                                             40

<PAGE>

         (d)      Notwithstanding any other provision of this Section except
                  Subsection (e), the early retirement Nonforfeitable Annual
                  Pension payable to a Participant who was a participant in the
                  MRP or the RIP as of December 31, 1997, will be the greater of
                  the amounts calculated under (a) and (b) of Section 4.3
                  (Normal Retirement Benefits for Participants in the MRP or
                  RIP), after those amounts are reduced as follows:

                  (1)      The Participant's Nonforfeitable Annual Pension
                           calculated under Section 4.1(Normal Retirement
                           Pension Formula) will be reduced by multiplying the
                           amount of the Participant's Annual Pension by the
                           early payment factor described in Subsection (a).

                  (2)      The Participant's annual accrued benefit calculated
                           under the MRP or the RIP as of December 31, 1997,
                           will be reduced by multiplying the Participant's
                           annual accrued benefit as of December 31, 1997, by
                           the product of (A) 5/12 of one percent and (B) the
                           number of whole calendar months by which the actual
                           commencement of the Participant's pension payments
                           precedes the first day of the calendar month
                           coincident with or following the Participant's 60th
                           birthday.

         (e)      If, as of his applicable Severance from Service Date, a
                  Participant has reached age 55, and the sum of his age (in
                  whole years) attained as of that date and the number of his
                  years of Service (in whole years) accumulated as of that date
                  equals or exceeds 85, he will receive a Nonforfeitable Annual
                  Pension computed under the appropriate early retirement Annual
                  Pension formula described in this Section, but the amount of
                  the Participant's pension will not be multiplied by the early
                  payment factor that otherwise would be applicable.

         (f)      A Participant who is eligible to terminate employment
                  voluntarily under the Redeployment Status Opportunity
                  provisions of the Severance Opportunity Plan

                                         41

<PAGE>

                  for Non-Union Employees of Cinergy Corp., as amended from
                  time to time, is eligible to receive a Nonforfeitable Annual
                  Pension computed under the appropriate early retirement Annual
                  Pension formula described in this Section, but the amount of
                  the Participant's pension will not be multiplied by the early
                  payment factor that otherwise would be applicable, provided
                  that: (1) as of his applicable Severance from Service Date,
                  the Participant has reached age 50, but not yet reached age
                  55, (2) he elects under Article 8 (Payment of Pension) to
                  defer receipt of his pension to at least age 55, and (3) the
                  sum of his age (in whole years) attained as of the date that
                  the receipt of the pension under the Plan begins pursuant to
                  Paragraph (2) and his years of Service (in whole years)
                  accumulated as of his Severance from Service Date equals or
                  exceeds 85.

4.5      GENERAL METHOD OF COMPUTING ANNUAL PENSION FOR A TERMINATED VESTED
         PARTICIPANT

         (a)      Subject to the following provisions of this Section, the
                  amount of Nonforfeitable Annual Pension payable to a former
                  Participant who is described in Section 5.3 (Severance from
                  Service After Vesting), and whose Actual Separation Date
                  occurred on or before his Normal Retirement Date, will be
                  computed under Section 4.1 (Normal Retirement Pension
                  Formula). The benefits will begin on the Employee's Normal
                  Retirement Date or, if the Employee so elects, at an earlier
                  date on or after his Early Retirement Date. If the Employee
                  elects to have the benefits begin before his Normal Retirement
                  Date, the amount of the Employee's Nonforfeitable Annual
                  Pension will be reduced by five percent for each calendar year
                  (or .4166 percent for each calendar month) by which the
                  commencement of his pension payments precedes his Normal
                  Retirement Date.

         (b)      Notwithstanding any other provision of this Section, the
                  terminated vested Nonforfeitable Annual Pension payable to a
                  Participant who was a participant in the PSI Plan as of
                  December 31, 1997, will be the greater of the amounts
                  calculated under (a) and (b) of Section 4.2 (Normal Retirement
                  Benefits for

                                            42

<PAGE>

                  Participants in the PSI Plan), after those amounts are reduced
                  for early payment as follows:

                  (1)      The Participant's Annual Pension calculated under
                           Section 4.1 (Normal Retirement Pension Formula) is
                           reduced as described in Subsection (a).

                  (2)      If the Participant elects to have his benefit begin
                           before his Normal Retirement Date, the Participant's
                           annual accrued benefit under the PSI Plan as of
                           December 31, 1997, is reduced by multiplying that
                           annual accrued benefit by the appropriate early
                           payment factor as obtained from the table in
                           Subsection 4.4(a) (General Method of Computing Annual
                           Pension for Retirement at Early Retirement Date).

         (c)      Notwithstanding any other provisions of this Section, the
                  terminated vested Nonforfeitable Annual Pension payable to a
                  Participant who (1) was a participant in the PSI Plan as of
                  December 31, 1997, and (2) became a participant in the PSI
                  Plan prior to May 1, 1970, will not be less than the product
                  of:

                  (A)      The amount computed under PSI Pension Formula 5 (as
                           set forth in Addendum A) as of the following date:

                           (i)      December 31, 1989, with respect to an
                                    Employee who is not a Highly Compensated
                                    Participant; or

                           (ii)     December 31, 1988, with respect to a Highly
                                    Compensated Participant; and

                  (B)      If the Participant elects to have his benefit begin
                           before his Normal Retirement Date, the early payment
                           factor as obtained from the table in Subsection
                           4.4(a) (General Method of Computing Annual Pension
                           for

                                              43

<PAGE>

                           Retirement at Early Retirement Date), except that
                           the early payment period will be the number of whole
                           calendar months by which the commencement of the
                           Participant's pension payments precedes the first day
                           of the calendar month coincident or following his
                           60th birthday.

         (d)      Notwithstanding any other provisions of this Section, the
                  terminated vested Nonforfeitable Annual Pension payable to a
                  Participant who (1) was a participant in the PSI Plan as of
                  December 31, 1997, and (2) became a participant in the PSI
                  Plan on or after May 1, 1970, will not be less than the
                  product of:

                  (A)      The amount computed under PSI Pension Formula 6 (as
                           set forth in Addendum A) as of the following date:

                           (i)      December 31, 1989, with respect to an
                                    Employee who is not a Highly Compensated
                                    Participant; or

                           (ii)     December 31, 1988, with respect to a Highly
                                    Compensated Participant; and

                  (B)      If the Participant elects to have his benefit begin
                           before his Normal Retirement Date, the early payment
                           factor determined as obtained from the table in
                           Subsection 4.4(a) (General Method of Computing Annual
                           Pension for Retirement at Early Retirement Date).

         (e)      Notwithstanding any other provision of this Section, the
                  terminated vested Nonforfeitable Annual Pension payable to a
                  Participant who was a participant in the MRP or the RIP as of
                  December 31, 1997, will be the greater of the amounts
                  calculated under (a) or (b) of Section 4.3 (Normal Retirement
                  Benefits for Participants in the MRP or RIP), after each of
                  those amounts is reduced by five percent for each calendar
                  year (or .4166 percent for each calendar month) by

                                           44

<PAGE>

                  which the commencement of the Participant's pension payments
                  precedes his Normal Retirement Date.

4.6      MAXIMUM PENSION

         (a)      Each Participant whose Annual Pension as otherwise determined
                  pursuant to the provisions of this Article and as modified by
                  the applicable provisions of Section 7.1 (Normal Forms of
                  Pensions) exceeds $1,000 multiplied by the Employee's years of
                  Service with the Employer (not exceeding ten), or who has ever
                  participated in a Qualified Defined Contribution Plan, will in
                  no event be entitled to an Annual Pension that exceeds the
                  lesser of:

                  (1)      $90,000 (as adjusted for increases in the limitation
                           pursuant to Code subsection 415(d)); or

                  (2)      100 percent of his highest average annual Section 415
                           Compensation from his Employer for any three
                           consecutive years of Service; provided, that if he
                           has fewer than three years of Service, then 100
                           percent of his highest average annual Section 415
                           Compensation from his Employer for his total years of
                           Service will be construed as the limiting amount.

         However, if a Participant has fewer than ten years of Participation at
         his Normal Retirement Date or Early Retirement Date, whichever is
         applicable, then the dollar limitation of Paragraph (1) will be
         multiplied by a fraction, the numerator of which is the number of the
         Participant's years of Participation (including fractional years of
         Participation) and the denominator of which is ten. However, the
         maximum benefit will never be reduced to less than 1/10th of the
         applicable limitation.

         (b)      If any benefit under the Plan begins before the Participant's
                  Social Security Retirement Age, but on or after the
                  Participant reaches age 62, the determination

                                      45

<PAGE>

                  as to whether the $90,000 limit set forth in Subsection (a)
                  has been satisfied will be made, in accordance with
                  regulations prescribed by the Secretary, by reducing the
                  limitation of Subsection (a). The reduction under the
                  preceding sentence will be made in the manner as the
                  Secretary may prescribe that is consistent with the reduction
                  for old-age insurance benefits commencing before the Social
                  Security Retirement Age under the Social Security Act. If any
                  benefit under the Plan begins before the Participant reaches
                  age 62, the determination as to whether the $90,000 limit
                  set forth in Subsection (a) has been satisfied will be made,
                  in accordance with regulations prescribed by the Secretary,
                  by reducing the limitation of Subsection (a) so that
                  the limitation (as reduced) equals an Annual Pension
                  (beginning when the retirement income benefit begins) that
                  is actuarially equivalent to the reduced $90,000 Annual
                  Pension beginning at age 62 as determined under this
                  Subsection.

         (c)      If any benefit under the Plan begins after the Participant's
                  Social Security Retirement Age, the determination as to
                  whether the $90,000 limitation set forth in Subsection (a) has
                  been satisfied will be made, in accordance with regulations
                  prescribed by the Secretary, by increasing, if necessary, the
                  limitation of Subsection (a) so that the limitation (as
                  increased) equals an Annual Pension (beginning when the
                  retirement income benefit begins) that is actuarially
                  equivalent to a $90,000 Annual Pension beginning at the Social
                  Security Retirement Age.

         (d)      In general, the maximum annual benefit means a benefit payable
                  annually in the form of a single life annuity (without
                  ancillary benefits). If a Participant's pension under the Plan
                  is payable in any form other than a single life annuity, the
                  determination as to whether the limitations of this Section
                  have been satisfied will be made by adjusting the benefit so
                  that it is the actuarial equivalent of a single life annuity.
                  For purposes of this Section, any ancillary benefit not
                  directly related to retirement income benefits, and that
                  portion of any joint and survivor annuity

                                       46

<PAGE>

                  that constitutes a Qualified Joint and Survivor Annuity under
                  Subsection 7.1(b) (Normal Forms of Pension), will not be
                  taken into account.

         (e)      For benefits commencing in Plan Years beginning on or after
                  January 1, 1995, and except as provided in this Plan, the
                  adjustments to the limitations under Subsections (b), (c), and
                  (d) will be calculated as described in this Subsection. For
                  purposes of adjusting the limit for an Annual Pension
                  commencing prior to age 62 under Subsection (b), the $90,000
                  limitation will be equal to the lesser of the equivalent
                  $90,000 limitation that is computed using the interest rate
                  and mortality table (or other tabular factor) specified in the
                  Plan for equivalence for early retirement benefits, and the
                  equivalent $90,000 limitation that is computed using a 5
                  percent interest rate assumption and the mortality table
                  prescribed from time to time by the Secretary for this
                  purpose. For purposes of adjusting any form of optional
                  benefit to a straight life annuity under Subsection (d), the
                  actuarially equivalent life annuity will be equal to the
                  greater of the annuity benefit that is computed using the
                  interest rate and mortality table (or other tabular factor)
                  specified in the Plan for adjusting benefits in the same form,
                  and the annuity benefit that is computed using a 5 percent
                  interest rate assumption and the mortality table prescribed
                  from time to time by the Secretary for this purpose. For
                  purposes of adjusting for any form of benefit subject to Code
                  paragraph 417(e)(3), an interest rate assumption equal to the
                  annual rate of interest on 30 year Treasury securities for
                  November of the preceding Plan Year, as specified by the
                  Commissioner of Internal Revenue, will be substituted for the
                  5 percent interest rate assumption set forth in the preceding
                  sentences. For purposes of adjusting the limit under
                  Subsection (c), the $90,000 limitation for an Annual Pension
                  beginning after Social Security Retirement Age will be the
                  lesser of the equivalent $90,000 limitation that is computed
                  using the interest rate and mortality table (or other tabular
                  factor) specified in the Plan for equivalence of delayed
                  retirement benefits, and the equivalent $90,000 limitation
                  that is computed using a 5 percent interest rate assumption
                  and the mortality table prescribed from time to time by

                                         47

<PAGE>

                  the Secretary for this purpose. Notwithstanding the preceding
                  provisions of this Subsection, this Subsection will not apply
                  to the accrued benefit of any Participant under the Plan as of
                  December 31, 1997, after applying Code section 415 as in
                  effect on December 7, 1994, for each possible Annuity Starting
                  Date and each optional form of benefit under the Plan.

         (f)      Notwithstanding the foregoing, the maximum annual benefit
                  payable under this Section will not be less than the actuarial
                  equivalent of the Participant's single life annuity, accrued
                  under the Plan, as of December 31, 1997, determined by using
                  the Plan's actuarial assumptions as in effect on December 31,
                  1997.

         (g)      If for any particular Plan Year, a Participant is also
                  participating in one or more Qualified Defined Contribution
                  Plans maintained by his Employer, then the sum of the
                  Participant's aggregate Defined Benefit Plan Fraction and the
                  Participant's aggregate Defined Contribution Plan Fraction
                  will not exceed 1.0. If the sum exceeds 1.0, then the Employer
                  will reduce the Participant's benefits in this Plan so that
                  the sum equals 1.0. The Participant's maximum Annual Pension
                  will be determined under the provisions of this Article
                  without regard to the $10,000 minimum amount referred to in
                  the first paragraph of this Section. This Subsection will be
                  repealed, effective January 1, 2000, for any Participant who
                  is credited with at least one Hour of Service on or after
                  January 1, 2000.

4.7      BENEFITS IF PLAN BECOMES A TOP-HEAVY PLAN

         If the Plan becomes a Top-Heavy Plan, the minimum accrued benefit of
         any Participant who was at no time a Key Employee will be equal to two
         percent of the Participant's Final Average Earnings multiplied by the
         number of Top-Heavy Plan Years in which he completed at least 1,000
         Hours of Service, but not more than ten years.

                                      48

<PAGE>

         If a non-Key Employee participates in the Plan and a Qualified Defined
         Contribution Plan included in a Required Aggregation Group that is
         Top-Heavy, the minimum benefits will be provided under this Plan.

         No increase in addition to the minimum accrued benefit described above
         will be made in the event the Plan becomes a Super Top-Heavy Plan.

                                    ARTICLE 5

                         SEVERANCE FROM SERVICE-VESTING

5.1      VESTING REQUIREMENT

         (a)      A Participant will satisfy the Vesting Requirement under the
                  Plan upon his completion of five years of Service and then
                  will have a Nonforfeitable right to his accrued benefit under
                  the Plan. A Participant who is an Employee on his Normal
                  Retirement Date will be deemed to satisfy the Vesting
                  Requirement as of that date if he has not already satisfied
                  the Vesting Requirement under the Plan. Notwithstanding the
                  preceding provisions of this Subsection, the Nonforfeitable
                  percentage of each Participant's right to his accrued benefit
                  derived from Employer contributions, because of a change to
                  the vesting schedule, will be not less than the Participant's
                  vested percentage, computed under the Plan as of the date
                  immediately prior to the change, without regard to the change.
                  Moreover, each Participant whose Nonforfeitable percentage of
                  his accrued benefit derived from Employer contributions is
                  determined under an amended vesting schedule, and who has
                  completed at least three years of Service as of the date of
                  the amendment may elect, within a reasonable period after the
                  adoption of the amended vesting schedule, to have the
                  Nonforfeitable percentage of his accrued benefit derived from
                  Employer contributions determined without regard to the
                  amendment if his Nonforfeitable percentage under the Plan as
                  amended is, at any time, less than the percentage determined
                  without regard to the amendment.

                                        49

<PAGE>

         (b)      If the Plan becomes a Top-Heavy Plan, the above Vesting
                  Requirement will not apply. Instead, each Participant's
                  Accrued Benefit under the Plan will be partially or fully
                  vested in accordance with the following schedule:

                         YEARS OF SERVICE                 PERCENT VESTED
                           2                                      20%
                           3                                      40%
                           4                                      60%
                           5 or more                             100%

                  In any Plan Year (other than a Top-Heavy Plan Year) that
                  succeeds one or more Top-Heavy Plan Years the following will
                  apply:

                  (1)      a Participant with five or more years of Service as
                           of the beginning of the Plan Year will become 100
                           percent vested in all his accrued benefits;

                  (2)      a Participant with at least two but less than five
                           years of Service as of the beginning of the Plan Year
                           will remain vested in his accrued benefit as of that
                           date in accordance with the Top-Heavy Vesting
                           schedule, but will vest in any forfeitable portion
                           and in any further accruals in accordance with
                           Subsection (a);

                  (3)      any other Participant will, as of that date, again be
                           subject to the provisions of Subsection (a) with
                           respect to all of his accrued benefit.

5.2      SEVERANCE FROM SERVICE BEFORE VESTING

         If a Participant incurs a Severance from Service before he has
         satisfied the Vesting Requirement and is not reemployed by an Employer,
         he will have no further interest in, or right to, any benefits under
         the Plan, except as otherwise provided in Section 14.2 (Reemployment).
         If upon a Severance from Service, a Participant is zero percent vested

                                         50

<PAGE>

         in his benefits under the Plan, the vested portion of his Plan benefits
         will be deemed distributed to him as of his Severance from Service
         Date.

5.3      SEVERANCE FROM SERVICE AFTER VESTING

         If a Participant incurs a Severance from Service before his 50th
         birthday, but after satisfying the Vesting Requirement, he will be
         entitled to receive a pension commencing on his 50th birthday, if he is
         then living, or the Participant may elect to begin receiving his
         benefit at any time on or after his Early Retirement Date. Subject to
         the provisions of Section 4.6 (Maximum Pension) and Article 7 (Forms of
         Pension), the amount of Nonforfeitable Annual Pension payable will be
         determined pursuant to the provisions of Section 4.5 (General Method of
         Computing Annual Pension for a Terminated Vested Participant).

                                    ARTICLE 6

                                SPOUSE'S BENEFIT

6.1      DETERMINATION OF SPOUSE'S BENEFIT

         Upon the death of either (a) an Active Participant who has satisfied
         the Vesting Requirement (an "Eligible Active Participant"), or (b) a
         former Participant who has satisfied the Vesting Requirement, whose
         employment with his Employer terminated before the Participant reached
         age 50, and whose pension under the Plan had not yet begun on the date
         of his death (an "Eligible Former Participant"), the Participant's
         Spouse on the date of his death, if living on the date of the first
         installment payable, as set forth below, will be entitled to receive a
         pension under the Plan as a Spouse's Benefit. The annual amount of the
         Spouse's Benefit will be determined as follows:

         (a)      If, at the date of his death, the Participant was either an
                  Eligible Active Participant or an Eligible Former Participant
                  who had reached age 50, the Spouse's benefit

                                      51

<PAGE>

                  will equal 100 percent of the Annual Pension that the
                  Participant would have received, commencing on the first
                  day of the calendar month coincident with or following the
                  date of his death, if (1) he had retired as of the first day
                  of the calendar month coincident with or following his death,
                  thus establishing an Early Retirement Date, (2) the amount
                  of Annual Pension commencing on the Early Retirement Date
                  had been determined pursuant to the applicable provisions of
                  Section 4.4 (General Method of Computing Annual Pension
                  for Retirement at Early Retirement Date), and (3) his pension
                  had been payable under the single-life option applicable
                  to him pursuant to Subsection 7.1(a) (Normal Forms of
                  Pension). However, subject to Subsection (b), if the
                  Participant's Spouse is more than eight years younger
                  than the Participant, the Spouse will receive the actuarial
                  equivalent of the benefit payable to a Spouse exactly eight
                  years younger than the Participant, calculated by multiplying
                  the Annual Pension that the Participant would have received
                  times the appropriate early payment factor under Subsection
                  4.4(a) (General Method of Computing Annual Pension for
                  Retirement at Early Retirement Date) and then multiplying the
                  resulting product by the appropriate Spouse's benefit factor
                  as obtained from the following table:

                                          52

<PAGE>

<TABLE>
<CAPTION>
                      PARTICIPANT'S AGE                 PARTICIPANT'S AGE AT DEATH
                LESS SPOUSE'S AGE (IN YEARS)               50-59        60 OR OLDER
                <S>                                     <C>             <C>
                           8 or less                       1.00               1.00
                           9                                .91                .90
                          10                                .82                .81
                          11                                .75                .72
                          12                                .68                .65
                          13                                .62                .59
                          14                                .56                .54
                          15                                .51                .49
                          16                                .47                .44
                          17                                .43                .40
                          18                                .39                .36
                          19                                .36                .33
                          20                                .33                .30
                          21                                .30                .28
                          22                                .28                .26
                          23                                .26                .24
                          24                                .24                .22
                          25                                .22                .20
</TABLE>

         (b)      Notwithstanding Subsection (a), if a Participant who had
                  reached age 50 at the date of his death was a participant in
                  the MRP or the RIP as of December 31, 1997, the Spouse's
                  benefit attributable to the Participant's accrued benefit
                  under the MRP or the RIP as of December 31, 1997, will be
                  calculated by multiplying the Participant's annual accrued
                  benefit under the MRP or the RIP as of December 31, 1997, by
                  the early payment factor described under Paragraph 4.4(d)(2)
                  (General Method of Computing Annual Pension for Retirement at
                  Early Retirement Date), and then multiplying the resulting
                  product by the MRP/RIP Spousal and Contingent Annuitant
                  benefit factor as obtained from the table in Addendum C of the
                  Plan.

         (c)      If, at the date of his death, the Participant was either an
                  Eligible Active Participant or an Eligible Former Participant
                  who, in either case, had not reached age 50, the Spouse's
                  benefit will equal 100 percent of the Annual Pension that the
                  Participant would have received commencing on the first day of
                  the calendar month coincident with or following his 50th
                  birthday, if (1) his Severance from Service

                                       53

<PAGE>

                  Date, in the case of an Eligible Active Participant, had been
                  the date of his death, (2) the amount of Annual Pension
                  (including the appropriate early payment reduction factor) had
                  been determined pursuant to the applicable provisions of
                  Section 4.5 (General Method of Computing Annual Pension for
                  Terminated Vested Participant), (3) he had survived and
                  elected to begin receiving pension payments on the first day
                  of the calendar month coincident with or following his 50th
                  birthday, and (4) his pension had been payable under the 100
                  percent option applicable to him pursuant to Subsection 7.1(b)
                  (Normal Forms of Pension).

         (d)      Notwithstanding Subsection (c), if a Participant who had not
                  attained age 50 at the date of his death was a participant in
                  the MRP or the RIP as of December 31, 1997, the Spouse's
                  benefit attributable to the Participant's accrued benefit
                  under the MRP or the RIP as of December 31, 1997, will be
                  calculated by multiplying the Participant's annual accrued
                  benefit under the MRP or the RIP as of December 31, 1997, by
                  the early payment factor described under Subsection 4.5(e)
                  (General Method of Computing Annual Pension for Terminated
                  Vested Participant) and then multiplying the resulting product
                  by the MRP/RIP Spousal and Contingent Annuitant benefit factor
                  as obtained from the table in Addendum C of the Plan.

6.2      METHOD OF PAYMENT OF SPOUSE'S BENEFIT

         A Spouse's benefit will be payable in equal monthly installments, each
         equal to 1/12th of the Annual Pension as determined pursuant to this
         Article. If at the date of his death the Eligible Active Participant or
         Eligible Former Participant had reached age 50, the first monthly
         installment of the Spouse's benefit will be payable to the
         Participant's Spouse on the first day of the calendar month coincident
         with or following the date of the Participant's death, if his Spouse is
         then living, unless the Spouse elects to defer payment until the date
         the Participant would have reached age 62. If at the date of his death
         the Participant had not reached age 50, the first monthly installment
         will be payable to the

                                    54

<PAGE>

         Participant's Spouse on the first day of the calendar month coincident
         with or following the date the Participant would have reached age 50,
         had he survived until that date, if his Spouse is then living, unless
         the Spouse elects to defer payment until the date the Participant
         would have reached age 65. In either event, subsequent monthly
         installments will be payable on the first day of each month and will
         cease upon the payment of the installment due on the first day of the
         calendar month in which the Spouse dies.

                                    ARTICLE 7

                                FORMS OF PENSION

7.1      NORMAL FORMS OF PENSION

         (a)      UNMARRIED PARTICIPANTS

                  The normal form of pension payable under the Plan to a
                  Participant who is not married on his Annuity Starting Date
                  and who does not otherwise elect an optional form of pension
                  under Section 7.2 (Optional Forms of Retirement Income), will
                  be a single-life income payable in equal monthly installments
                  throughout the Participant's lifetime, ceasing with the
                  installment due on the first day of the calendar month in
                  which his death occurs. Each monthly installment will equal
                  1/12th of the Annual Pension as determined pursuant to Article
                  4 (Amount of Life-Only Pension), or Article 5 (Severance from
                  Service-Vesting), whichever is applicable to the Participant.

         (b)      MARRIED PARTICIPANTS

                  The normal form of pension payable under the Plan to a
                  Participant who is married on his Annuity Starting Date and
                  who does not otherwise elect an optional form of pension under
                  Section 7.2 (Optional Forms of Retirement

                                      55

<PAGE>

                  Income) is a "Qualified Joint and Survivor Annuity," which
                  will be paid as follows:

                  (1)      To the Participant:

                           A reduced pension based on the 100 percent option in
                           equal monthly installments payable on his Annuity
                           Starting Date and on the first day of each calendar
                           month thereafter. The reduced amount payable to the
                           Participant will be the Actuarial Equivalent of the
                           amount that would otherwise be paid to the
                           Participant if he were unmarried. Payments will cease
                           with the installment due on the first day of the
                           calendar month in which the Participant dies.

                           If a Participant has an annual accrued benefit under
                           the MRP or the RIP as of December 31, 1997, the
                           reduced pension payable to him will not be less than
                           the Participant's annual accrued benefit under the
                           MRP or the RIP as of December 31, 1997, multiplied by
                           the applicable MRP/RIP Spousal and Contingent
                           Annuitant benefit factor from the table in Addendum C
                           to the Plan.

                  (2)      To his Spouse:

                           A pension payable in equal monthly installments, each
                           monthly installment being equal to 100 percent of the
                           monthly installment paid to the Participant. The
                           first installment will be payable on the first day of
                           the calendar month following the Participant's death,
                           if the Spouse is then living; subsequent installments
                           are payable on the first day of each calendar month,
                           ceasing with the installment due on the first day of
                           the calendar month in which the Spouse dies. If the
                           Participant's Spouse predeceases the Participant
                           after reduced pension payments under this

                                          56

<PAGE>

                           Subsection have begun, payments will be made to the
                           Participant after the Spouse's death in the form of
                           an unreduced single life annuity pursuant to
                           Subsection (a) as of the first day of the month after
                           the Participant notifies the Committee of the
                           Spouse's death.

                           If a Participant who is entitled to benefits under
                           the provisions of Section 4.4 (General Method of
                           Computing Annual Pension for Retirement at Early
                           Retirement Date) dies after his Actual Separation
                           Date, but prior to the commencement of pension
                           payments, and if the Participant's Actual Separation
                           Date is on or after his 50th birthday, under the
                           normal form of pension applicable to him, his Spouse
                           will be entitled to receive, commencing on the first
                           day of the calendar month following the Participant's
                           death, if the Spouse is then living, a monthly
                           pension, with each monthly installment equal to the
                           amount that would have been payable to the Spouse
                           following the Participant's death pursuant to his
                           election, or if no election is made, then pursuant to
                           the provisions of this Paragraph (b)(2), if the
                           Participant had begun receiving pension benefits on
                           the first day of the calendar month in which the
                           Participant died.

7.2      OPTIONAL FORMS OF RETIREMENT INCOME

         Subject to the following conditions, a Participant, by making a request
         to the Committee or its designee within the election period specified
         in this Section, may elect to receive, in lieu of the normal form of
         pension applicable to him under Section 7.1 (Normal Forms of Pension),
         one of the optional forms of pension specified under this Section (the
         "Contingent Pension Option"). Each election must be made by the
         Participant in a manner prescribed by the Committee or its designee.
         The election of the Contingent Pension Option will take effect at a
         specified date, referred to as the "Option Effective Date." The amount
         of pension payable under any optional form will be the Actuarial

                                       57

<PAGE>

         Equivalent of the pension to which the Participant would otherwise be
         entitled under the Plan.

         At least 30 days but no more than 90 days before a Participant's
         Annuity Starting Date, the Committee or its designee will provide the
         Participant whose normal form of pension applicable to him is described
         in Subsection 7.1(a) (Normal Forms of Pension) with a written
         explanation of (a) the terms and conditions of the normal form of
         pension benefits applicable to him under Subsection 7.1(a) (Normal
         Forms of Pension); (b) the Participant's ability to elect to receive,
         in lieu of the normal form of pension applicable to him under
         Subsection 7.1(a) (Normal Forms of Pension), an optional form of
         pension under this Section; (c) the relative financial effect of the
         election on his pension benefits; (d) the availability of additional
         information describing the particular financial effect of the election
         upon his pension benefit; and (e) the procedures the Participants must
         follow to obtain the additional information.

         The Committee or its designee will provide each Participant whose
         normal form of pension is a Qualified Joint and Survivor Annuity, at
         least 30 days but no more than 90 days before the Participant's Annuity
         Starting Date, a written explanation of (a) the terms and conditions of
         the Qualified Joint and Survivor Annuity, (b) the Participant's right
         to make and the effect of an election to waive a Qualified Joint and
         Survivor Annuity, (c) the rights of a Participant's Spouse with respect
         to the selection of benefit forms, and (d) the right to make and the
         effect of a revocation of a previous election to waive the Qualified
         Joint and Survivor Annuity. A Participant may elect to waive any
         requirement that the Applicable Election Period extend at least 30 days
         after the Committee provides the Participant with the written
         explanations described in this Section, if the distribution begins more
         than seven days after the applicable written explanation is provided.
         If the Participant is married, the Participant's Spouse must consent to
         the waiver in writing before a notary public or a Plan representative.

                                          58

<PAGE>

         To be effective, an election to waive the Qualified Joint and Survivor
         Annuity must be made in writing during the 90 day period ending on the
         Annuity Starting Date and, if the Participant is married, it must be
         consented to by the Participant's Spouse. The election must designate a
         Beneficiary (or a form of benefits) that may not be changed (except
         back to a Qualified Joint and Survivor Annuity) without the Spouse's
         consent, unless the Spouse's original consent expressly permits
         designations by the Participant without any requirements of further
         consent by the Spouse. The Spouse's consent must be given in writing
         during the 90 day period ending on the Annuity Starting Date, must
         acknowledge the effect of the election and the consent, and must be
         witnessed by a Plan representative or notary public. If the Participant
         establishes to the satisfaction of a Plan representative that the
         Spouse's written consent cannot be obtained because there is no Spouse
         or the Spouse cannot be located, the Spouse's consent will be deemed to
         have been given. If a Participant is legally separated from his Spouse
         or has been abandoned by his Spouse (within the meaning of local law)
         and the Participant has a court order to such effect, the Spouse's
         consent will not be required unless a Qualified Domestic Relations
         Order provides otherwise. Any Spousal consent will be valid only with
         respect to the Spouse who signs the consent, or in the event of a
         deemed consent, the designated Spouse. If a Participant's Spouse is
         legally incompetent to give consent, the Spouse's legal guardian (even
         if the guardian is the Participant) may give consent. A Participant may
         revoke a prior effective election at any time prior to the receipt of
         benefits.

         (a)      SINGLE-LIFE OPTION

                  A married Participant whose normal form of pension is a
                  Qualified Joint and Survivor Annuity may elect, in lieu of all
                  payments otherwise payable, a single-life pension that
                  provides payments to the Participant in equal monthly
                  installments throughout his lifetime, ceasing with the
                  installment due on the first day of the calendar month in
                  which the Participant dies. Each monthly installment will be
                  equal to 1/12th of the Annual Pension as determined pursuant


                                       59
<PAGE>

                  to Article 4 (Amount of Life-Only Pension), Article 5
                  (Severance from Service-Vesting) or Article 6 (Spouse's
                  Benefit), whichever is applicable.

         (b)      CONTINGENT PENSION OPTION

                  A Participant may elect, in lieu of all payments otherwise
                  payable on and after the Option Effective Date, the Contingent
                  Pension Option providing payments as follows:

                  (1)      To the Participant:

                           A reduced pension beginning on the Option Effective
                           Date, with subsequent monthly payments payable on the
                           first day of each subsequent calendar month
                           throughout his remaining lifetime, terminating with
                           the payment due on the first day of the calendar
                           month in which he dies. The reduced amount payable to
                           the Participant will be determined in accordance with
                           the Participant's choice of the 100 percent, 66 2/3
                           percent, or 50 percent option and will be the
                           Actuarial Equivalent of the amount that would
                           otherwise be paid to the Participant under the
                           single-life annuity option applicable to him pursuant
                           to Subsection 7.2(a) (Optional Forms of Retirement
                           Income). An option cannot be elected, modified, or
                           rescinded after the Option Effective Date.

                           If a Participant has an annual accrued benefit under
                           the MRP or the RIP as of December 31, 1997, the
                           reduced pension payable to him will not be less than
                           the Participant's annual accrued benefit under the
                           MRP or the RIP as of December 31, 1997, multiplied by
                           (A) for the 100 percent option, the applicable
                           MRP/RIP Spousal and Contingent Annuitant Benefit
                           factor from the table in Addendum C to the Plan, or
                           (B) for the 50 percent


                                       60
<PAGE>

                           option, the applicable 50 percent Contingent
                           Annuitant Benefit factor from the table in
                           Addendum D to the Plan.

                  (2)      To the Contingent Annuitant designated by the
                           Participant at the time he elects this option:

                           A contingent pension beginning on the first day of
                           the calendar month following the calendar month in
                           which the Participant's death occurs if the
                           Participant dies on or after the Option Effective
                           Date, and if the Contingent Annuitant is then living,
                           with subsequent monthly payments payable on the first
                           day of each subsequent calendar month throughout the
                           Contingent Annuitant's remaining lifetime,
                           terminating with the monthly payment due on the first
                           day of the calendar month in which the Contingent
                           Annuitant dies. However, if the Participant had
                           elected to defer his pension payments, the Contingent
                           Annuitant may elect, at any time prior to the date
                           contingent pension payments actually begin, to have
                           the payments begin after the Participant's death on
                           the first day of any calendar month coincident with
                           or prior to the date the Participant had elected to
                           start receiving his pension payments.

                           The monthly amount payable to the Contingent
                           Annuitant will be a specified percentage of the
                           reduced pension payable under this option to the
                           Participant, as specified by the Participant. This
                           percentage will be either 100 percent, 66 2/3
                           percent, or 50 percent. Notwithstanding the
                           foregoing, if the Contingent Annuitant is other than
                           the Participant's Spouse, the Contingent Pension
                           Option may be elected only if the requirements of 26
                           C.F.R. Section 1.401(a)(9)-2 are satisfied.

                  An option will not become effective, and payments will be made
                  as otherwise provided in the Plan as if this option had never
                  been elected, if: (a) the Participant


                                       61
<PAGE>

                  is not living on the Option Effective Date, (b) the
                  Participant does not, within 90 days after his election, and
                  not later than the Option Effective Date, furnish evidence,
                  satisfactory to the Committee, of the age of his Contingent
                  Annuitant, or (c) the Participant elects, prior to the Option
                  Effective Date, to cancel the option. If the Participant's
                  Contingent Annuitant predeceases the Participant after the
                  contingent pension payments have begun, the option will be
                  canceled and no longer effective, and payments will be made
                  to the Participant in the form of an unreduced single-life
                  annuity applicable to him pursuant to Subsection 7.2(a)
                  (Optional Forms of Retirement Income) as of the first day
                  of the month after the Participant notifies the Committee
                  of the Contingent Annuitant's death.

         (c)      LIFE WITH TEN YEAR CERTAIN OPTION

                  A Participant may, in lieu of all payments otherwise payable
                  on and after the Option Effective Date, elect the Life with
                  Ten Year Certain Option providing payments as follows:

                  (1)      To the Participant:

                           A reduced pension beginning on the Option Effective
                           Date with subsequent monthly payments payable on the
                           first day of each calendar month thereafter for ten
                           years or throughout his remaining lifetime, whichever
                           is longer, terminating with the payment due on the
                           first day of the calendar month after the end of ten
                           years or in which the Participant dies, whichever is
                           applicable.

                           If the Participant elects the Life with Ten Year
                           Certain Option, the amount of the Participant's
                           Nonforfeitable annual pension will be determined by
                           multiplying his Annual Pension by the appropriate
                           Life with Ten Year Certain Factor as obtained from
                           the following table:


                                       62
<PAGE>

<TABLE>
<CAPTION>
                               LIFE WITH TEN YEAR CERTAIN FACTORS
                               ----------------------------------
                       AGE            FACTOR           AGE           FACTOR
                       ---            ------           ---           ------
                       <S>            <C>              <C>           <C>
                       50             .9869            70            .9065
                       51             .9855            71            .8977
                       52             .9839            72            .8883
                       53             .9823            73            .8780
                       54             .9803            74            .8670
                       55             .9783            75            .8553
                       56             .9760            76            .8429
                       57             .9734            77            .8299
                       58             .9706            78            .8163
                       59             .9674            79            .8021
                       60             .9639            80            .7875
                       61             .9601            81            .7723
                       62             .9558            82            .7569
                       63             .9511            83            .7413
                       64             .9461            84            .7253
                       65             .9407            85            .7090
                       66             .9347            86            .6925
                       67             .9285            87            .6758
                       68             .9217            88            .6591
                       69             .9145            89            .6424
                                                       90            .6259
</TABLE>

                  (2)      To the Beneficiary designated by the Participant at
                           the time he elects this option:

                           If the Participant dies prior to the end of ten years
                           from the date of his initial pension payment, a
                           contingent pension payable on the first day of the
                           calendar month following the calendar month in which
                           the Participant dies if the Participant's death is on
                           or after the Option Effective Date and if the
                           Beneficiary is then living, with subsequent monthly
                           payments being payable on the first day of each
                           calendar month for the balance of ten years from the
                           date of the Participant's Option Effective Date.


                                      63
<PAGE>

         (d)      LIFE ANNUITY LEVEL INCOME OPTION

                  A Participant who retires prior to reaching age 62 may elect,
                  in lieu of all payments otherwise payable on and after the
                  Option Effective Date, the Life Annuity Level Income Option,
                  which provides payments to the Participant that are adjusted
                  for the months before and after the Participant is eligible to
                  receive benefits under the Social Security Act at age 62.

                  The Participant will receive a reduced pension on the Option
                  Effective Date, with subsequent monthly payments payable on
                  the first day of each calendar month thereafter for his
                  remaining lifetime, terminating with the payment due on the
                  first day of the calendar month in which his death occurs. The
                  reduced pension the Participant receives will be calculated as
                  follows:

                  (1)      Subject to Paragraph (5), the Participant's Annual
                           Pension will be determined under Article 4 (Amount of
                           Life-Only Pension), Article 5 (Severance From
                           Service-Vesting), or Article 6 (Spouse's Benefit),
                           whichever is applicable.

                  (2)      Subject to Paragraph (5), the Participant's Reduced
                           Primary Social Security Benefit will be multiplied by
                           the appropriate Level Income Option factor from the
                           table in Addendum E to the Plan.

                  (3)      The sum of the amounts determined under Paragraphs
                           (1) and (2) will equal the Level Income Option
                           benefit payable to the Participant prior to age 62,
                           which is the first date he is eligible to begin
                           receiving Social Security Act benefits.


                                       64
<PAGE>

                  (4)      The Level Income Option benefit payable to the
                           Participant after he reaches age 62 will equal the
                           amount determined in Paragraph (3), minus the
                           Participant's Reduced Primary Social Security
                           Benefit.

                  (5)      If a Participant has an annual accrued benefit under
                           the MRP or the RIP as of December 31, 1997, the Level
                           Income Option benefit payable to that Participant
                           will not be less than the sum of (A) and (B), where
                           (A) equals the Participant's annual accrued benefit
                           under the MRP or the RIP as of December 31, 1997, and
                           (B) equals the Participant's Reduced Primary Social
                           Security Benefit multiplied by the appropriate
                           MRP/RIP Level Income Option factor from the table in
                           Addendum F to the Plan.

         (e)      100 PERCENT CONTINGENT ANNUITANT LEVEL INCOME OPTION

                  A Participant who retires prior to reaching age 62 may, in
                  lieu of all payments otherwise payable on after the Option
                  Effective Date, elect the 100 Percent Contingent Annuitant
                  Level Income Option, which provides payments as follows:

                  (1)      To the Participant:

                           A reduced pension that is adjusted for the months
                           before and after the Participant is eligible to
                           receive benefits under the Social Security Act at age
                           62. The Participant will receive a reduced pension on
                           the Option Effective Date, with subsequent monthly
                           payments payable on the first day of the calendar
                           month thereafter for his remaining lifetime,
                           terminating with the payment due on the first day of
                           the calendar month in which the Participant dies.

                           The reduced pension the Participant receives under
                           this option will be calculated as follows:


                                       65
<PAGE>

                           (A)      Subject to Subparagraph (F), the
                                    Participant's Annual Pension will be
                                    determined under Article 4 (Amount of
                                    Life-Only Pension), Article 5 (Severance
                                    From Service-Vesting), or Article 6
                                    (Spouse's Benefit), whichever is applicable.

                           (B)      The Participant's Annual Pension will be
                                    converted to a reduced pension based on the
                                    100 percent Contingent Pension Option under
                                    Subsection 7.2(b) (Optional
                                    Forms of Retirement Income).

                           (C)      Subject to Subparagraph (F), the
                                    Participant's Reduced Primary Social
                                    Security Benefit will be multiplied by the
                                    appropriate Level Income Option factor from
                                    the table in Addendum E to the Plan.

                           (D)      The sum of the amounts determined under
                                    Subparagraphs (B) and (C) will equal the
                                    Level Income Option benefit payable to the
                                    Participant prior to age 62, which is the
                                    first date he is eligible to begin receiving
                                    Social Security Act benefits.

                           (E)      The Level Income Option benefit payable to
                                    the Participant after he attains age 62 will
                                    equal the amount determined in Subparagraph
                                    (D), minus the Participant's Reduced Primary
                                    Social Security Benefit.

                           (F)      If a Participant has an annual accrued
                                    benefit under the MRP or the RIP as of
                                    December 31, 1997, the Level Income Option
                                    benefit payable to that Participant will not
                                    be less than the sum of (i) and (ii), where
                                    (i) equals the Participant's annual accrued
                                    benefit under the MRP or RIP as of December
                                    31, 1997, converted to a reduced pension
                                    based on the 100 percent Contingent
                                    Annuitant Pension Option under Subsection
                                    7.2(b) (Optional Forms of Retirement


                                       66
<PAGE>

                                    Income), and (ii) equals the Participant's
                                    Reduced Primary Social Security Benefit
                                    multiplied by the appropriate MRP/RIP Level
                                    Income Option factor from the table in
                                    Addendum F to the Plan.

                  (2)      To the Contingent Annuitant:

                           A contingent pension beginning on the first day of
                           the calendar month following the calendar month in
                           which the Participant dies if the Participant dies on
                           or after the Option Effective Date, and if the
                           Contingent Annuitant is then living; with subsequent
                           monthly payments payable on the first day of each
                           subsequent calendar month throughout the Contingent
                           Annuitant's remaining lifetime, terminating with the
                           monthly payment due on the first day of the calendar
                           month in which the Contingent Annuitant dies.
                           However, if the Participant had elected to defer his
                           pension payments, the Contingent Annuitant may elect
                           at any time prior to the date contingent pension
                           payments actually begin, to have the payments begin
                           after the Participant's death on the first day of any
                           calendar month coincident with or prior to the date
                           the Participant had elected to start receiving
                           payments.

                           The monthly amount payable to the Contingent
                           Annuitant will equal 100 percent of the reduced
                           pension that would have been payable under this
                           option to the Participant.

                  An option will not become effective, and payments will be made
                  as otherwise provided in the Plan as if this option had never
                  been elected, if: (a) the Participant is not living on the
                  Option Effective Date, (b) the Participant does not, within 90
                  days after his election, but not later than the Option
                  Effective Date, furnish evidence, satisfactory to the
                  Committee, of the age of his Contingent Annuitant, or (c) the
                  Participant elects, prior to the Option Effective Date, to
                  cancel the option.


                                       67
<PAGE>

                  If the Participant's Contingent Annuitant predeceases the
                  Participant after the contingent pension payments have begun,
                  the option will be canceled and no longer effective, and
                  payments will be made to the Participant in the form of a
                  reduced single-life annuity level income option applicable to
                  him pursuant to Subsection 7.2(d) (Optional Forms of
                  Retirement Income) as of the first day of the month
                  after the Participant notifies the Committee of the Contingent
                  Annuitant's death. An option cannot be elected, modified, or
                  rescinded after the Option Effective Date.

                                    ARTICLE 8

                               PAYMENT OF PENSION

8.1      TIMING OF PAYMENT

         This Section is subject to the provisions of Section 8.6 (Required
         Payment of Benefits).

         A Participant who ceases to be an Employee as of his Normal Retirement
         Date will begin receiving any pension payable to him under the Plan as
         of his Normal Retirement Date. A Participant who continues as an
         Employee after his Normal Retirement Date will begin receiving the
         pension payable to him under the Plan as of the first day of the
         calendar month coincident with or following his Severance from Service.

         A Participant who ceases to be an Employee as of an Early Retirement
         Date will begin receiving his pension at his Normal Retirement Date
         unless he elects to begin receiving his pension on either his Early
         Retirement Date or the first day of a calendar month between his Early
         Retirement Date and his Normal Retirement Date (the "Deferred Pension
         Payment Date"); provided he has made the required election, in a manner
         prescribed by the Committee, prior to the date he wants his pension to
         begin.


                                       68
<PAGE>

8.2      METHOD OF PAYMENT

         Unless specified elsewhere in the Plan, all pension payments under the
         Plan will normally be payable in equal monthly installments, with each
         monthly installment equal to 1/12th of the annual amount payable.
         Pension payments will be (a) made by check to the order of the
         Participant, his Spouse, or his Contingent Annuitant, as applicable,
         and mailed to that person's address as it appears on the Employer's
         records, or (b) deposited directly into an account of the Participant,
         his Spouse, or his Contingent Annuitant, as applicable, maintained by
         the recipient at a bank, savings and loan, or other financial
         institution, as directed by the recipient.

8.3      SMALL BENEFITS

         Notwithstanding the provisions of Sections 6.2 (Method of Payment of
         Spouse's Benefit) and 7.2 (Optional Forms of Retirement Income), where
         the Actuarial Equivalent present value of a Participant's
         Nonforfeitable pension or Spouse's benefit under Section 6.1
         (Determination of Spouse's Benefit) does not exceed $5,000, the
         Committee or its designee will pay the Nonforfeitable pension or
         Spouse's benefit (if applicable) in a single-sum cash payment equal to
         the Actuarial Equivalent of the pension or Spouse's benefit otherwise
         payable.

8.4      FACILITY OF PAYMENT

         If any benefit under the Plan is payable to a person whom the Committee
         knows is a minor or otherwise under legal incapacity, the Committee or
         its designee may have the payment made to the legal guardian of that
         person or to the person or organization as a court of competent
         jurisdiction may direct. To the extent permitted by law, any payment
         under this Section will be a complete discharge of any liability under
         the Plan to that person.

                                          69

<PAGE>

8.5      BENEFITS FOR LATE RETIREES, REEMPLOYED RETIREES AND REEMPLOYED
         TERMINATED VESTED PARTICIPANTS

         (a)      LATE RETIREES

                  A Participant may postpone his retirement and continue his
                  employment with an Employer after his Normal Retirement Date.
                  If a Participant continues employment after his Normal
                  Retirement Date, he will continue to accrue years of Service
                  and years of Participation during this time period up to the
                  date of his actual retirement. The Participant's benefit will
                  be calculated under Article 4 (Amount of Life-Only Pension),
                  Article 5 (Severance From Service-Vesting), or Article 6
                  (Spouse's Benefit), whichever is applicable, as of his
                  Severance from Service Date.

         (b)      SUSPENSION OF RETIREMENT BENEFIT NOTICE FOR PARTICIPANT WHO
                  CONTINUES EMPLOYMENT AFTER HIS NORMAL RETIREMENT DATE

                  When a Participant continues in employment with an Employer
                  beyond his Normal Retirement Date, benefits will not begin
                  during that continued period of employment unless required
                  under Section 8.6 (Required Payment of Benefits). The
                  Participant will be sent a notification described in Section.
                  2530.203-3(b)(4) of the Department of Labor regulations,
                  provided that the suspension of benefits notice is limited to
                  periods of service within the context of Section.
                  2530.203-3(c) of the Department of Labor regulations.

         (c)      REEMPLOYED RETIREES AND REEMPLOYED VESTED TERMINATED
                  PARTICIPANTS

                  A Reemployed Retiree or Reemployed Vested Terminated
                  Participant who resumes employment will continue to receive
                  any pension benefit payments under the Plan to which he is
                  entitled, and will begin to receive any pension benefit

                                     70

<PAGE>

                  payments under the Plan, as if he were not reemployed. When
                  a Reemployed Retiree or Reemployed Terminated Vested
                  Participant again incurs a Severance from Service, his
                  Annual Pension will, subject to all of the provisions of the
                  Plan, be recalculated by aggregating his years of
                  Participation and by considering his Earnings during his
                  period of reemployment; provided, however, that the
                  Participant's benefits as recalculated will not be less than
                  the Actuarial Equivalent of his Annual Pension prior to his
                  reemployment. The Participant's recalculated Annual Pension
                  will be reduced by the Actuarial Equivalent of the pension
                  benefits already paid to the Participant. Any pension benefit
                  payable to a Spouse or Contingent Annuitant will also be based
                  on the Participant's pension benefit, as so recalculated and
                  reduced.

         (d)      QUESTIONS CONCERNING EFFECT ON REEMPLOYMENT

                  The Plan's benefit claims procedures may be used by an
                  individual who has questions concerning the effect of
                  reemployment by his Employer upon his pension benefit
                  payments.

         (e)      ADDITIONAL RULES AND PROCEDURES

                  The Committee is authorized to develop more fully the
                  provisions of this Section by establishing, from time to time,
                  various rules and procedures consistent with ERISA, the Code,
                  and the Plan.

8.6      REQUIRED PAYMENT OF BENEFITS

         This Section has been included in the Plan to comply with the
         limitations imposed by Code paragraphs 401(a)(9) and 401(a)(14), and it
         will not be construed as providing for a form of benefit not otherwise
         provided under the Plan. Notwithstanding any provision of this Plan to
         the contrary, any distribution under the Plan will be made in
         accordance with

                                        71

<PAGE>

         regulations under Code paragraph 401(a)(9), including proposed federal
         income tax regulation 1.401(a)(9)-2, and will comply with the following
         rules:

         (a)      Unless a Participant elects otherwise, the payment of his
                  benefits under the Plan must begin not later than the 60th day
                  after the end of the Plan Year in which occurs the latest of:
                  (1) the Participant's 65th birthday; (2) the 10th anniversary
                  of the Plan Year in which the Participant began participation
                  in the Plan; or (3) termination of the Participant's
                  employment with the Employer.

         (b)      For purposes of this Article, "required beginning date" means
                  (1) with respect to a Participant who is not a 5 percent owner
                  as described in Code section 416 and who did not reach age
                  70 1/2 before January 1, 1997, April 1 of the calendar year
                  following the later of (A) the calendar year in which the
                  Participant reaches age 70 1/2, or (B) the calendar year in
                  which the Participant retires; or (2) with respect to a
                  Participant who is a 5 percent owner as described in Code
                  section 416, or any Participant who reached age 70 1/2 before
                  January 1, 1997, April 1 of the calendar year following the
                  calendar year in which the Participant reaches age 70 1/2. The
                  Plan will provide an actuarial increase to a Participant's
                  interest in the Plan for the period beginning on the April 1
                  of the calendar year following the calendar year in which the
                  Participant reaches age 70 1/2 and ending on the date on which
                  benefits begin after the Participant's retirement in an amount
                  sufficient to satisfy Code paragraph 401(a)(9). The benefits
                  payable to the Participant at the end of the period described
                  in the preceding sentence will be no less than the Actuarial
                  Equivalent of the benefit that would have been payable to the
                  Participant as of the April 1 of the calendar year following
                  the calendar year in which the Participant reached 70 1/2.

         (c)      Notwithstanding any other provision of this Plan, the entire
                  interest of each Participant will be distributed either: (1)
                  in a lump sum payment not later than the required beginning
                  date, or (2) in a series of payments beginning not later than
                  the

                                            72

<PAGE>

                  required beginning date over the life of the Participant
                  or over the lives of the Participant and the designated
                  Beneficiary (or over a period not extending beyond the life
                  expectancy of the Participant or the life expectancy of the
                  Participant and a designated Beneficiary). If the
                  Participant's interest is to be paid in the form of annuity
                  distributions under the Plan, payments under the annuity will
                  satisfy the following requirements:

                  (1)      The annuity distributions must be paid in periodic
                           payments made at intervals not longer than one year.

                  (2)      For purposes of computing the distribution period,
                           life expectancies or joint and last survivor
                           expectancies will not be recalculated.

                  (3)      Once payments have begun, the distribution period may
                           not be lengthened even if that period would be
                           shorter than the permitted maximum period.

                  (4)      Payments must either be non-increasing or increase
                           only as follows:

                           (A)      with any percentage increase in a specified
                                    and generally recognized cost-of-living
                                    index;

                           (B)      to the extent of the reduction to the amount
                                    of the Participant's payments to provide for
                                    a survivor benefit upon death, but only if
                                    the Beneficiary or Contingent Annuitant
                                    whose life was being used to determine the
                                    distribution period dies and the payments
                                    continue otherwise over the life of the
                                    Participant;

                           (C)      to provide cash refunds of employee
                                    contributions upon the Participant's death;
                                    or

                                      73

<PAGE>

                           (D)      because of an increase in benefits under the
                                    Plan.

                  (5)      If the annuity is a life annuity (or a life annuity
                           with a period certain not exceeding 20 years), the
                           amount that must be distributed on or before the
                           Participant's required beginning date (or, in the
                           case of distributions after the death of the
                           Participant, the date distributions are required to
                           begin after the Participant's death) will be the
                           payment that is required for one payment interval.
                           The second payment need not be made until the end of
                           the next payment interval even if that payment
                           interval ends in the next calendar year. Payment
                           intervals are the periods for which payments are
                           received, e.g., bi-monthly, monthly, semi-annually or
                           annually. If the annuity is a period certain annuity
                           without a life contingency (or is a life annuity with
                           a period exceeding 20 years), periodic payments for
                           each distribution calendar year will be combined and
                           treated as an annual amount. The amount that must be
                           distributed by the Participant's required beginning
                           date (or, in the case of distributions after the
                           death of the Participant, the date distributions are
                           required to begin after the Participant's death) is
                           the annual amount for the first distribution calendar
                           year. The annual amount for other distribution
                           calendar years, including the annual amount for the
                           calendar year in which the Participant's required
                           beginning date (or the date distributions are
                           required to begin after the Participant's death)
                           occurs, must be distributed on or before December 31
                           of the calendar year for which the distribution is
                           required.

         (d)      If (1) the distribution of a Participant's interest has begun
                  in accordance with Subsection (c), and (2) the Participant
                  dies before his entire interest has been distributed to him,
                  the remaining portion of his interest will be distributed at
                  least as rapidly as under the method of distribution being
                  used under Subsection (c) as of the date of his death.

                                      74

<PAGE>

         (e)      Except as provided in Subsection (f), if a Participant dies
                  before the distribution of his interest has begun in
                  accordance with Subsection (c), the Participant's entire
                  interest will be distributed within five years after his
                  death.

         (f)      For purposes of Subsection (c), any portion of a distribution
                  that is payable to (or for the benefit of) a designated
                  Beneficiary will be treated as completely distributed on the
                  date on which distribution began if:

                  (1)      that portion is to be distributed (in accordance with
                           regulations prescribed by the Secretary) over the
                           life of the designated Beneficiary (or over a period
                           not extending beyond the life expectancy of the
                           Beneficiary), and

                  (2)      distributions begin by the latest of (A) one year
                           after the date of the Participant's death, (B) any
                           later date that the Secretary may establish by
                           regulations, or (C) if the Beneficiary is the
                           Participant's surviving Spouse, the date on which the
                           Participant would have attained age 70-1/2.

         (g)      If the designated Beneficiary is the Participant's surviving
                  Spouse, and if the surviving Spouse dies before the
                  distributions to the Spouse begin, Subsections (c), (e), and
                  (f) will be applied as if the surviving Spouse were the
                  Participant.

         (h)      For purposes of Subsection (f), payment will be calculated by
                  use of the expected return multiples specified in Tables V and
                  VI of 26 C.F.R. Section.1.72-9. The life expectancy of a
                  designated Beneficiary will be calculated at the time payment
                  first commences without further recalculation.

         (i)      For purposes of Subsections (c), (d), (e), and (f), if any
                  amounts payable to a child of the Participant becomes payable
                  to the Participant's surviving Spouse and the child reaches
                  the age of majority, that amount will be treated as if it had
                  been paid to the surviving Spouse.

                                        75

<PAGE>

         (j)      Unless paid to the surviving Spouse under a Qualified Joint
                  and Survivor Annuity, the method of distribution selected must
                  assure that at least 50 percent of the present value of the
                  amount available for distribution is paid within the
                  Participant's life expectancy.

         (k)      If a Participant reaches age 70 1/2 on or after January 1,
                  1997, but before January 1, 1999, the Plan will deem the
                  Participant's "required beginning date" to be April 1 of the
                  calendar year following the calendar year in which the
                  Participant reaches age 70 1/2 unless the Participant elects,
                  with his Spouse's consent, to defer commencement of his Plan
                  benefits until a date no later than April 1 of the calendar
                  year following the calendar year in which the Participant
                  retires.

8.7      DIRECT ROLLOVERS OF ELIGIBLE DISTRIBUTIONS

         Notwithstanding any provision of the Plan to the contrary that would
         otherwise limit a Distributee's election under this Section, a
         Distributee may elect, at the time and in the manner prescribed by the
         Committee, to have any portion of an Eligible Rollover Distribution
         paid directly to an Eligible Retirement Plan specified by the
         Distributee in a Direct Rollover.

                                    ARTICLE 9

                         RETIREE MEDICAL/DENTAL BENEFITS

9.1      PURPOSE

         This Article provides for the payment of certain Medical/Dental
         Benefits to Eligible Retirees and to their Dependents under the Plan.
         The Medical/Dental Benefits described in this Article are intended to
         meet the requirements of Code subsection 401(h) and its interpretive
         regulations.

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9.2      ELIGIBILITY

         Only Eligible Individuals will be eligible to receive Medical/Dental
         Benefits (or to have Medical/Dental Benefits paid on their behalf)
         under this Article.

9.3      SEPARATE ACCOUNT

         A Medical/Dental Benefits Account will be established and maintained
         with respect to contributions made to fund the benefits payable under
         this Article, which will be kept separate (for recordkeeping purposes
         only) from the amounts contributed to the Plan to fund all other
         benefits. The funds in the Medical/Dental Benefits Account may be
         invested with funds contributed to the Plan to fund other benefits
         without identification of which assets of the Plan are allocable to the
         Medical/Dental Benefits Account and which are allocable to fund other
         benefits. Where the assets are not so allocated, however, the earnings
         on the assets will be allocated in a reasonable manner between the
         Medical/Dental Benefits Account and the amounts funding other benefits
         under the Plan.

9.4      IMPOSSIBILITY OF DIVERSION PRIOR TO SATISFACTION OF ALL LIABILITIES

         Prior to the satisfaction of all liabilities under this Article to
         provide for the payment of Medical/Dental Benefits, no part of the
         corpus or income of the Medical/Dental Benefits Account may be (within
         the taxable year or thereafter) used for, or diverted to, any purpose
         other than providing Medical/Dental Benefits or paying any reasonable
         expenses attributable to the administration of the Medical/Dental
         Benefits Account.

9.5      REVERSION UPON SATISFACTION OF ALL LIABILITIES

         Notwithstanding the provisions of Section 14.8 (No Diversion of
         Assets), any amounts that are contributed to fund Medical/Dental
         Benefits and that remain in the Medical/Dental Benefits Account upon
         the satisfaction of all liabilities arising out of the

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<PAGE>

         operation of this Article are to be returned to Eligible Retirees,
         in proportion to their respective total contributions to the
         Medical/Dental Benefits Account.

9.6      FORFEITURES

         In the event an Eligible Individual's interest in the Medical/Dental
         Benefits Account is forfeited prior to termination of the Plan, an
         amount equal to the amount of the forfeiture will be applied as soon as
         possible to reduce Employer contributions to the Plan to fund the
         Medical/Dental Benefits under this Article.

9.7      EMPLOYER CONTRIBUTIONS TO THE MEDICAL/DENTAL BENEFITS ACCOUNT

         For each Plan Year, the Employer will contribute to the Medical/Dental
         Benefits Account the amount necessary to fund Medical/Dental Benefits,
         as determined by the Plan's actuaries, provided that the contributions
         mandated by this sentence will be reasonable, and will be reduced (but
         not below zero) as required so that the aggregate actual contributions
         made to the Medical/Dental Benefits Account will not exceed 25% of the
         total aggregate actual contributions (other than any contributions to
         fund past service credits) made to the Plan. All contributions to the
         Medical/Dental Benefits Account will be paid to the Trustee, who will
         hold them in Trust for the payment of Medical/Dental Benefits under
         this Article. At the time an Employer makes a contribution to the Plan,
         it will designate the portion allocable to the Medical/Dental Benefits
         Account.

9.8      MEDICAL/DENTAL BENEFITS

         The Medical/Dental Benefits under the Plan will be those benefits
         payable to or on behalf of Eligible Individuals in accordance with the
         terms of a Medical/Dental Plan.

                                      78

<PAGE>


                                   ARTICLE 10

                            NONALIENATION OF BENEFITS

The Pension Fund will not in any manner be liable for, or subject to, the
debts or liabilities of any Participant, Beneficiary, Contingent Annuitant,
or Spouse, or any other person entitled to any benefit. No payee may assign
any payment due him under the Plan. No pension or other benefits at any time
payable from the Pension Fund will be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, attachment, garnishment,
levy, execution, or other legal or equitable process or encumbrance of any
kind. Any attempt to alienate, sell, transfer, assign, or otherwise encumber
any such benefit, whether presently or thereafter payable, will be void.
However, the payment of benefits under the Plan will be made in accordance
with the applicable requirements of any Qualified Domestic Relations Order
entered by a court of competent jurisdiction or a state administrative
agency. The Committee will establish procedures to determine whether the
domestic relations orders are Qualified Domestic Relations Orders and to
administer distributions under Qualified Domestic Relations Orders.

                                   ARTICLE 11

                                 ADMINISTRATION

11.1     ADMINISTRATOR

         The Committee will be the administrator of the Plan. The Committee will
         consist of the number of members, not fewer than three, that is
         specified from time to time by the Board of Directors. All members of
         the Committee will be Employees or officers of an Employer. All members
         of the Committee will serve without compensation.





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11.2     REMOVAL AND REPLACEMENT OF COMMITTEE MEMBERS

         The members of the Committee will serve at the pleasure of the Board of
         Directors and may be removed by the Board of Directors with or without
         cause. Any vacancy among the members will be filled by the Board of
         Directors.

11.3     DISQUALIFICATION AND RESIGNATION

         On the date when a Committee member is neither an Employee nor an
         officer of an Employer, he will be disqualified from membership on the
         Committee. A member of the Committee may resign by delivering his
         written resignation to any other member of the Committee. A resignation
         will become effective on the date specified in the instrument of
         resignation.

11.4     CHAIRPERSON, SERVICES, AND COUNSEL

         The members of the Committee will elect one of their members as
         Chairperson and will elect a Secretary, who may be, but need not be,
         one of the members of the Committee. Cinergy will provide the
         Committee, at Cinergy's expense, with such clerical, accounting,
         actuarial, and other services as may be reasonably required by the
         Committee in carrying out its responsibilities. The Committee may
         employ counsel, who may be, but need not be, counsel to Cinergy.

11.5     MEETINGS

         The Committee will hold meetings upon such notice, at the places, and
         at the times as the Committee may from time to time determine, but no
         less often than quarterly.



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11.6     QUORUM

         A majority of the members of the Committee at the time holding office
         will constitute a quorum for the transaction of business. All
         resolutions and other action taken by the Committee at any meeting will
         be by the vote of the majority of the members of the Committee present
         at the meeting.

11.7     ACTION WITHOUT MEETING

         Any decision, order, direction, or other action, including orders and
         directions to the Trustee or Insurance Company, made in writing signed
         by a majority of the members of the Committee at the time holding
         office will constitute valid and effective action of the Committee,
         whether or not the matter to which that decision, order, direction, or
         other action pertains had already been acted upon at a duly called and
         held meeting of the Committee.

11.8     NOTICE TO TRUSTEE OF CHANGES IN MEMBERSHIP

         The Trustee will not be charged with notice of any change in the
         membership of the Committee unless and until it has received a
         certified copy of the resolution or vote of the Board of Directors
         effecting the change.

11.9     CORRECTION OF DEFECTS

         The Committee may correct any defect or supply any omission or
         reconcile any error or inconsistency in its previous proceedings,
         decisions, orders, directions, or other actions in a manner and to such
         extent as it will deem advisable to carry out the purposes of the Plan.



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11.10    RELIANCE UPON LEGAL COUNSEL

         The members of the Committee, and Cinergy, and Cinergy's officers and
         directors, will be entitled to rely upon all opinions given by legal
         counsel selected by the Committee.

11.11    EXPENSES

         In the performance of its duties, the Committee is authorized to incur
         reasonable expenses, including counsel fees. All operating expenses of
         the Plan, including insurance premiums payable to the Pension Benefit
         Guaranty Corporation, fees for professional services, and technical or
         clerical assistance, will be paid from the Pension Fund, to the extent
         not paid by the Employer. Investment expenses and any federal, state,
         or local taxes that may be levied against the Pension Fund will also be
         paid from the Pension Fund.

11.12    INDEMNIFICATION

         Cinergy agrees to indemnify and hold harmless each member of the
         Committee against any cost, expense, or liability (including any sum
         paid in settlement of any claim with the approval of the Board of
         Directors) arising out of any act or omission to act as a member of the
         Committee, except only acts and omissions representing willful
         misconduct, fraud, or lack of good faith.

11.13    POWERS AND DUTIES OF COMMITTEE

         Subject to the specific limitations stated in this document, the
         Committee will have the following powers, duties, and responsibilities:

         (a)      to carry out the Plan's general administration;



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<PAGE>


         (b)      to cause to be prepared all forms necessary or appropriate for
                  the Plan's administration;

         (c)      to keep appropriate books and records, including minutes of
                  the Committee's meetings;

         (d)      to determine, consistent with the provisions of this document,
                  the manner in which the Pension Fund will be allocated and
                  disbursed;

         (e)      to give directions to the Trustee or Insurance Company as to
                  the amounts to be disbursed to Participants and others under
                  the Plan's provisions;

         (f)      to determine, with discretionary authority and consistent with
                  the provisions of this document, all questions of the
                  eligibility, rights, and status of Participants and others
                  under the Plan;

         (g)      to exercise all other powers and duties specifically conferred
                  upon the Committee elsewhere in this document and the Trust
                  Agreement or Group Annuity Contract;

         (h)      to exercise all duties and responsibilities imposed by ERISA
                  upon the Committee as the Plan's administrator;

         (i)      to interpret, with discretionary authority, the provisions of
                  the Plan and to resolve, with discretionary authority, all
                  disputed questions of Plan interpretation and benefit
                  eligibility;

         (j)      to employ agents to assist it in performing its administrative
                  duties; and

         (k)      to allocate and delegate its fiduciary responsibilities in
                  accordance with ERISA section 405.



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<PAGE>


         The Committee will at all times make similar decisions on similar
         questions involving similar circumstances. Subject to the provisions
         of ERISA and to the provisions of Article 12 (Benefit Claims
         Procedures) relating to claims, all decisions of the Committee made
         in good faith on all matters within the scope of its authority under
         the provisions of this document will be final and binding upon all
         persons.


11.14    MATTERS SPECIFICALLY EXCLUDED FROM JURISDICTION

         Notwithstanding any other provision of this document, the Committee
         will have no power, duty, or authority with respect to determination of
         the amounts to be contributed by the Employer to the Pension Fund or
         Trust Fund.

                                   ARTICLE 12

                            BENEFIT CLAIMS PROCEDURES

Claims for benefits under the Plan will be made in writing to the Committee
or its designee. If a claim for benefits is wholly or partially denied, the
Committee or its designee will notify the Claimant of the claim's denial
within a reasonable period of time not to exceed 90 days after the claim's
receipt, unless special circumstances require an extension of time for
processing, in which case notification will be rendered as soon as possible,
but not later than 180 days after the claim's receipt. If an extension of
time for processing is required, written notice of the extension will be
furnished to the Claimant prior to the termination of the initial 90 day
period. The extension notice will indicate the special circumstances
requiring an extension of time and the date by which the Plan expects to
render final notification. The notice of denial will be written in a manner
calculated to be understood by the Claimant and will set forth (a) the
specific reason or reasons for the denial, (b) a specific reference to the
pertinent Plan provisions on which the denial is based, (c) a description of
any additional material or information necessary for the Claimant to perfect
the claim and an explanation of why that material or information is
necessary, and (d) appropriate information as to the steps to be taken if the
Claimant wishes to submit the claim for review. The Committee or its designee
is authorized to develop more fully



                                      84


<PAGE>


the Plan's benefit claims procedures by establishing from time to time,
various rules and procedures consistent with ERISA.

Within 60 days after the Claimant's receipt of written notice of the claim's
denial, the Claimant, or his duly authorized representative, may file a
written request with the Committee requesting a full and fair review of the
denial of the Claimant's claim for benefits. In connection with the
Claimant's appeal of the denial of his claim for benefits, the Claimant may
review pertinent documents in the Committee's possession and may submit
issues and comments in writing. The Committee will make a decision on review
promptly, but not later than the date of the Committee meeting that
immediately follows the receipt of the Claimant's request for review, unless
the request for review is filed within 30 days before the date of that
meeting. In that case, a decision will be made as soon as possible, but not
later than the date of the second Committee meeting following receipt of the
request for review. If special circumstances require a further extension of
time for processing, a decision will be rendered not later than the third
Committee meeting following receipt of the Claimant's request for review. If
an extension of time for review is required because of special circumstances,
written notice of the extension will be sent to the Claimant before the
extension begins. The extension notice will indicate the special
circumstances requiring an extension of time and the date by which the
Committee expects to render the final decision. The decision on review will
be in writing and written in a manner calculated to be understood by the
Claimant, will set forth the specific reason or reasons for the decision, and
will contain a specific reference to the pertinent Plan provisions on which
the decision is based. If the decision on review is not furnished to the
Claimant within 60 days of receipt of the request for review, or within 120
days after its receipt if special circumstances required an extension of
time, the claim will be deemed denied on review.

                                   ARTICLE 13

                            FUNDING POLICY AND METHOD

Cinergy will establish and carry out a funding policy and method for the Plan
consistent with (a) the Plan's past experience, (b) the Plan's anticipated
experience, (c) the Plan's objectives,



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<PAGE>


(d) the requirements of ERISA, and (e) the requirements of the Code. Cinergy
will (a) communicate the funding policy and method to the Committee, (b)
periodically review the funding policy and method, and (c) document all
action taken with respect to the funding policy and method.

                                   ARTICLE 14

                                  MISCELLANEOUS

14.1     NO ENLARGEMENT OF EMPLOYEE BENEFITS

         This Plan is strictly a voluntary undertaking on the part of each
         Employer and will not be deemed to constitute a contract between an
         Employer and any Employee or to be consideration for, or an inducement
         to, or a condition of, the employment of any Employee. Nothing
         contained in the Plan will be deemed to give any Employee the right to
         be retained in the service of an Employer or to interfere with the
         right of the Employer to discharge any Employee at any time. No
         Employee, prior to his retirement under conditions of eligibility for
         pension benefits or prior to his satisfying the Vesting Requirement
         will have any right to, or interest in, any portion of any fund arising
         from his Employer's contributions under this Plan or, in any event,
         other than as specifically provided in the Plan. No person will have
         any right to pension benefits except to the extent provided in the
         Plan.

14.2     REEMPLOYMENT

         If an Eligible Employee incurs a Severance from Service and is later
         reemployed by an Employer, his two (or more) periods of employment
         will, subject to all of the provisions of the Plan, be aggregated for
         the purpose of determining his Year of Eligibility Service, his years
         of Participation, and his years of Service.



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<PAGE>


14.3     QUALIFIED MILITARY SERVICE

         Notwithstanding any provision of this Plan to the contrary,
         contributions, benefits, and service credits with respect to qualified
         military service will be provided in accordance with Code subsection
         414(u)

14.4     NOTICE OF ADDRESS

         Each Participant, Retired Participant, Terminated Vested Participant,
         Beneficiary, Contingent Annuitant, and Spouse entitled to benefits
         under the Plan must submit to the Committee or its designee his post
         office address and each change of post office address. Any
         communication, statement, or notice addressed to a person at his latest
         post office address filed with the Committee or its designee will, upon
         deposit in the United States mail with postage prepaid, be binding upon
         that person for all purposes of the Plan, and neither the Insurance
         Company, the Committee, nor the Trustee will be obliged to search for,
         or to ascertain the whereabouts of, any person.

14.5     DATA

         Participants, Retired Participants, Terminated Vested Participants,
         Beneficiaries, Contingent Annuitants, and Spouses must furnish to the
         Committee, the Insurance Company, and the Trustee any documents,
         evidence, or information that the Committee, the Insurance Company, or
         the Trustee considers necessary or desirable for the purpose of
         administering the Plan, or to protect the Committee, the Insurance
         Company, or Trustee; and it will be a condition of the Plan that each
         person must furnish this information promptly and sign required
         documents before any benefits become payable under the Plan.



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<PAGE>


14.6     NO INDIVIDUAL LIABILITY

         It is the express purpose and intention of the Plan that, except as
         otherwise required by law, no individual liability whatever will attach
         to, or be incurred by, the shareholders, officers, or members of the
         board of directors of any Employer, or the Committee, or its members,
         or any fiduciary designated pursuant to Section 11.13 (Powers and
         Duties of Committee), or any representatives appointed by Cinergy under
         the Plan, under or by reason of any of the terms or conditions of the
         Plan.

14.7     PARTICIPANT'S STATEMENT OF AGREEMENT

         Cinergy will have the right, at any time, to require any Participant to
         agree in writing to be bound by the Plan's provisions. However, the
         absence of an agreement will not relieve any Participant from being
         legally bound by the provisions of the Plan.

14.8     NO DIVERSION OF ASSETS

         None of the assets of the Pension Fund may be used for, or diverted to,
         purposes other than the exclusive benefit of the Participants and their
         Beneficiaries. However, nothing in this Section will prohibit the
         return to the Employers, in accordance with the provisions of ERISA
         subsection 403(c), of a contribution (or a portion of a contribution)
         by the Employers to the Pension Fund if the contribution is (a) made by
         reason of mistake of fact, (b) conditioned on the initial qualification
         of the Plan under Code subsection 401(a), or (c) conditioned upon its
         deductibility under Code section 404 and the deduction is not fully
         allowed.

14.9     GOVERNING LAWS

         The Plan will be construed and administered according to the internal
         laws of the State of Ohio to the extent that those laws are not
         preempted by federal law.



                                      88


<PAGE>


14.10    SEVERABILITY

         If any part of the Plan is adjudged by a court of competent
         jurisdiction to be contrary to the laws governing the Plan, then the
         Plan will, in all other respects, be and remain legally effective and
         binding to the full extent permissible under the law.

14.11    INTERPRETATION AND REGULATION OF PLAN

         Cinergy, by action of the Committee, reserves the right to interpret
         and regulate the Plan, by exercise of discretionary authority, and its
         interpretation and regulation will be legally effective and binding on
         all parties concerned.

14.12    COMMUNICATIONS BY PARTICIPANTS

         All communications by Participants and other concerned parties
         concerning the Plan will be in writing and directed to the Committee or
         its designee.

14.13    HEADINGS

         The headings of Articles, Sections, Subsections, Paragraphs or other
         parts of the Plan are for convenience of reference only and do not
         define, limit, construe, or otherwise affect the contents of this
         document.

14.14    ACCRUED BENEFIT NOT TO BE DECREASED BY AMENDMENT

         Notwithstanding any other provisions of the Plan to the contrary, no
         accrued benefit of a Participant under the Plan will be decreased by an
         amendment to the Plan, other than an amendment described in Code
         paragraph 412(c)(8) or ERISA section 4281. For purposes of this
         Subsection, an amendment to the Plan that has the effect of:



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<PAGE>


         (a)      eliminating or reducing an early retirement benefit or a
                  retirement-type subsidy (as defined in the regulations under
                  Code paragraph 411(d)(6)), or

         (b)      eliminating an optional form of benefit, with respect to
                  benefits attributable to service before the amendment,

         will be treated as reducing the accrued benefit of a Participant. In
         the case of any retirement-type subsidy, the preceding sentence will
         apply only with respect to a Participant who satisfies (either before
         or after the amendment) the preamendment conditions for the subsidy.

                                   ARTICLE 15

                         TRUSTS AND INSURANCE CONTRACTS

15.1     TRUSTS AND INSURANCE CONTRACTS

         As part of the Plan, the Employers have established a Pension Fund. The
         Pension Fund may consist of a trust, or a fund under a group annuity
         contract issued by an Insurance Company, or a combination of each.
         Benefits may, however, be provided through other trusts or insurance
         contracts as Cinergy, in its sole discretion, may establish or cause to
         be established or entered into for the purposes of carrying out the
         Plan. Cinergy will determine the form and terms of any trust and will
         also determine the terms and provisions of any group annuity contract.
         Cinergy may also, in its sole discretion, cause any funds held by any
         Insurance Company, or any Trust Fund held by any Trustee, for the
         purpose of providing benefits under the Plan, to be transferred to any
         other Insurance Company, or qualified Trustee, to be held for the same
         purpose.



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<PAGE>


15.2     IRREVOCABILITY

         The Employers will have no right, title, or interest in the Pension
         Fund or to the contributions made under the Plan, and no part of the
         Pension Fund will revert to the Employers, except that upon termination
         of the Plan and after satisfaction or provision for the satisfaction of
         all fixed and contingent liabilities or obligations to persons entitled
         to benefits upon the termination, any balance remaining in the Pension
         Fund will be distributed to the Employers. However, nothing in this
         Section will prohibit the return, in accordance with the provisions of
         ERISA subsection 403(c), to the Employers of a contribution (or a
         portion of a contribution) by the Employers to the Pension Fund if the
         contribution is (a) made by reason of mistake of fact, (b) conditioned
         on the initial qualification of the Plan under Code subsection 401(a),
         or (c) conditioned upon its deductibility under Code section 404 and
         the deduction is not fully allowed.

15.3     SUFFICIENCY OF PENSION FUND

         The Employer intends the Plan to be a permanent, as distinguished from
         a temporary, program. Except as otherwise provided by the Code or
         ERISA, however, the Employer will not be under any liability to make
         contributions to the Pension Fund. Benefits under the Plan are to be
         paid only from the Pension Fund and only to the extent that the Pension
         Fund is sufficient for that purpose. Neither Cinergy, nor any of the
         officers, employees, members of the Board of Directors, the Committee,
         or representatives of Cinergy guarantees in any manner nor, unless
         otherwise required by law, will be liable for the payment of benefits
         under the Plan. Except as otherwise provided by ERISA, any person
         having any claim under, or in connection with, the Plan must look
         solely to the Pension Fund for satisfaction.



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<PAGE>


                                   ARTICLE 16

                                  CONTRIBUTIONS

No contributions to the Plan by Participants will be required or permitted under
the Plan.

During the continuance of the Plan and for the purpose of providing the benefits
contemplated under the Plan, the Employer intends to deposit, from time to time,
with the Trustee or with the Insurance Company, sums of money, to be held in the
Pension Fund, which, together with the earnings of the Pension Fund, will be
deemed sufficient to provide the benefits of the Plan and to satisfy the minimum
funding standards set forth in ERISA. All contributions by the Employer to the
Pension Fund are expressly conditioned upon deductibility under Code section
404.

                                   ARTICLE 17

                      APPROVAL UNDER INTERNAL REVENUE CODE

The Plan as set forth in this document is intended to comply with the
requirements of Code subsection 401(a), so that the income of the Pension Fund
may be exempt from federal income taxes and so that contributions of the
Employers under the Plan may be deductible for federal income tax purposes under
Code section 404. Any modification or amendment of the Plan may be made,
retroactive or otherwise, as necessary or appropriate to establish and maintain
its qualified status under the Code, or to otherwise comply with ERISA.

                                   ARTICLE 18

                       TEMPORARY RESTRICTIONS ON BENEFITS

18.1     TEMPORARY RESTRICTIONS

         (a)      Notwithstanding any other provisions of the Plan, the benefit
                  of any Highly Compensated Participant upon the Plan's
                  termination will be limited to a benefit that is
                  nondiscriminatory under Code paragraph 401(a)(4).



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<PAGE>


         (b)      Upon the Plan's termination, annual payments of Plan benefits
                  made on behalf of any of the 25 highest paid Employees or
                  former Employees of the Employer and the Affiliates in a
                  particular Plan Year will be restricted to an amount equal in
                  each Plan Year to:

                  (1)      the payments that would be made on behalf of the
                           Employee under a single life annuity that is the
                           Actuarial Equivalent of the accrued benefit and other
                           benefits to which the Employee is entitled under the
                           Plan (other than a social security supplement), plus

                  (2)      the amount of the payments that the Employee is
                           entitled to receive under a social security
                           supplement.

         (c)      The restrictions of Subsection (b) will not apply to payments
                  made to an Employee who is one of the 25 highest paid
                  Employees or former Employees if any one of the following
                  requirements is satisfied:

                  (1)      After payment to the Employee of all benefits payable
                           to the Employee under the Plan, the value of the
                           Plan's assets equals or exceeds 110 percent of the
                           value of the Plan's current liabilities as defined
                           under Code paragraph 412(l)(7). The value of Plan
                           assets and the value of current liabilities for this
                           purpose must be determined as of the same date;

                  (2)      The value of the benefits payable to the Employee
                           under the Plan is less than one percent of the value
                           of the Plan's current liabilities before
                           distribution, or

                  (3)      The value of the benefits payable to the Employee
                           does not exceed $5,000.



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                                   ARTICLE 19

                            AMENDMENT AND TERMINATION

19.1     RIGHT TO AMEND OR TERMINATE

         Cinergy reserves the right to modify, alter, amend, revoke or terminate
         the Plan and/or any Trust Fund or group annuity contract that may be
         established or entered into to effectuate and implement the Plan at any
         time. The Board of Directors will generally have the authority to adopt
         amendments; however, the Committee or the compensation committee of the
         Board of Directors may adopt any amendment to ensure the continued
         qualification of the Plan and Pension Fund under Code subsections
         401(a) and 501(a), to comply with the provisions of any federal statute
         or regulation impacting pension plans, to enhance the delivery of
         benefits to Participants and Beneficiaries, to ease Plan
         administration, or to respond to the withdrawal of any Employer from
         the Plan. Notwithstanding the preceding sentence, no amendment by the
         Committee or the compensation committee of the Board of Directors will
         substantially increase the cost of the Plan without the Board of
         Directors' consent.

         The Board of Directors, or any person or persons duly authorized by the
         Board of Directors, will also have the right, authority, and power to
         terminate the Plan and to discontinue or suspend the payment of
         contributions to provide benefits under the Plan (except for the
         provision of any agreement which has been entered into between an
         Employer and a labor union representing Eligible Employees). However,
         no action taken pursuant to this Section will operate to enlarge the
         right of Cinergy under Section 15.2 (Irrevocability).



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19.2     EFFECT OF TERMINATION

         If a partial or complete termination of the Plan occurs, all
         Participants with respect to whom the Plan is being so terminated will
         have a Nonforfeitable right to their benefits accrued under the Plan up
         to the date of termination of the Plan to the extent then funded.

         Except as otherwise required by ERISA section 4044, Cinergy will direct
         the Trustee and/or Insurance Company to segregate the Pension Fund, as
         determined by Cinergy to be attributable to the group that is
         terminating its participation in the Plan, and to make separate
         allocations of the segregated assets among the respective persons
         having interests in them. The separate allocations will be made as
         follows:

         (a)      First, either:

                  (1)      in the case of the pension of a Retired Participant,
                           a Terminated Vested Participant, a Spouse, or a
                           Contingent Annuitant that began at least three years
                           prior to the termination date of the Plan, that
                           portion of the pension that is based on the
                           provisions of the Plan as in effect at any time
                           during the five-year period ending on the termination
                           date, which would result in the least amount, or

                  (2)      in the case of the pension of an Active Participant,
                           a Participant who has incurred a Severance from
                           Service, or either a Retired Participant or a
                           Terminated Vested Participant not included in
                           Paragraph (1) of this Subsection (a) that three years
                           prior to the termination date of the Plan would have
                           began had the Participant then become a Retired
                           Participant, a Terminated Vested Participant, or the
                           Participant's Spouse or Contingent Annuitant, that
                           portion of the pension that is based on the
                           provisions of the Plan that were in effect at any
                           time during the five-year period ending on the
                           termination date, which would result in the least
                           amount;



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         (b)      Second, all other pensions under the Plan that are guaranteed
                  by the Pension Benefit Guaranty Corporation;

         (c)      Third, all other pensions with respect to both (1) Retired
                  Participants, Terminated Vested Participants, Spouses, and
                  Contingent Annuitants and (2) Active Participants and
                  Participants who have incurred a Severance from Service who,
                  as of the date of termination of the Plan, have
                  completed the Vesting Requirement of the Plan; and

         (d) All other pensions under the Plan.

                  If the balance of the Pension Fund allocable to the
                  terminating group that is remaining after allocations have
                  been made with respect to all pensions in a preceding class or
                  group is insufficient to allocate the full Actuarial
                  Equivalent of pensions to all persons in the class or group
                  for which it is then being applied, the balance will be
                  allocated to each person in the class or group in the
                  proportion to which the Actuarial Equivalent of the pension
                  allocable to him pursuant to the class or group bears to the
                  total Actuarial Equivalent of the pensions so allocable to all
                  persons in the class or group. However, if the balance is
                  sufficient to allocate a portion only of the full Actuarial
                  Equivalent of the pensions set forth in Subsection (c), then
                  the amounts of pension otherwise provided will be redetermined
                  based on the provisions of the Plan as in effect five years
                  prior to the termination date, or, if applicable, as of the
                  later date as will provide for the allocation of the full
                  Actuarial Equivalent thereof.

                  The amounts so allocated will, subject to the rights of the
                  Insurance Company under the Group Annuity Contract governing
                  allocations of small annuities, be purchased under the Group
                  Annuity Contract or other group annuity contract.



                                      96


<PAGE>


                  Any balance remaining in the Pension Fund that is allocable to
                  the terminating group, and after all allocations have been
                  made pursuant to the foregoing provisions of this Subsection,
                  will be allocated to the Employers.

19.3     MERGER AND CONSOLIDATION OF PLAN

         In the case of any merger or consolidation with, or transfer of assets
         and liabilities to, any other plan, provisions will be made so that
         each Participant in the Plan on the date thereof (if the Plan had then
         terminated) would receive a benefit immediately after the merger,
         consolidation or transfer that is equal to, or greater than, the
         benefit he would have been entitled to receive immediately prior to the
         merger, consolidation, or transfer if the Plan had then terminated.

19.4     POST-CHANGE IN CONTROL MERGER, CONSOLIDATION, OR TRANSFER OF PENSION
         PLAN ASSETS OR LIABILITIES

         Notwithstanding the preceding provisions of this Article or any other
         provision of this Plan, in the event of any merger or consolidation of
         this Plan with another employee benefit plan or any transfer of assets
         or liabilities of this Plan to another plan that is effected within
         three years following a Change in Control, (a) the accrued benefit of
         each Participant who is actively employed by an Employer as of the
         effective date of the merger, consolidation, or transfer of assets or
         liabilities and with respect to whom liability for the payment of
         benefits under the Plan is being merged or consolidated with or
         transferred to another plan will become fully vested; (b) the vested
         accrued benefit of each Participant, former Participant, and
         Beneficiary with respect to whom any liability for the payment of
         benefits under the Plan is being merged or consolidated with or
         transferred to another plan will be increased in accordance with
         Section 19.6 (Post-Change in Control Surplus Reversion) as if the Plan
         had terminated immediately prior to any merger, consolidation, or
         transfer (and for purposes of calculating the increase, the accrued
         benefits of all other Participants, former Participants and their
         Beneficiaries will



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<PAGE>


         be deemed to have increased in accordance with Section 19.6
         (Post-Change in Control Surplus Reversion)); and (c) prior to
         consummation of any merger, consolidation, or transfer, the accrued
         benefit (as increased, if applicable) of each Participant, former
         Participant, and Beneficiary with respect to whom liability for the
         payment of benefits under the Plan is being merged or consolidated
         with or transferred to another plan will be satisfied by the purchase
         of a guaranteed annuity contract from a financially sound insurance
         company that represents an irrevocable commitment to satisfy the
         accrued benefit (as increased, if applicable) of the person.
         Notwithstanding the provisions of Section 19.1 (Right to Amend or
         Terminate), the provisions of this Section may not be amended by an
         amendment to the Plan effective within three years following a Change
         in Control.

19.5     GENERAL PROTECTION OF BENEFITS IN THE EVENT OF A CHANGE IN CONTROL

         Notwithstanding any other provisions of this Plan, for a period of
         three years following a Change in Control, the provisions of this Plan
         may not be amended in any manner that would adversely affect in any way
         the computation or amount of or the entitlement to retirement benefits
         under the Plan, including, but not limited to, any adverse change in or
         to (a) the rate at which benefits accrue or vest, (b) the compensation
         recognized under the Plan, or (c) the optional forms of payment
         available to a Participant or Beneficiary under the Plan, including the
         time of commencement of benefits and any actuarial factors utilized.
         Notwithstanding the provisions of Section 19.1 (Right to Amend or
         Terminate), the provisions of this Section may not be amended by an
         amendment effective within three years following a Change in Control.

19.6     POST-CHANGE IN CONTROL SURPLUS REVERSION

         Notwithstanding the preceding provisions of this Article or any other
         provision of the Plan, in the event this Plan is terminated within
         three years following a Change in Control, the assets of the Plan will
         be applied in accordance with the preceding provisions



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         of this Article to satisfy all liabilities to Participants, former
         Participants, and their Beneficiaries. If, after satisfaction of the
         liabilities, there are assets remaining in the Plan, the balance will
         be applied on a pro rata basis based upon final vested benefit to
         increase the benefits of the Participants, former Participants, and
         their Beneficiaries, subject however, to the applicable legal
         limitations on benefits payable from tax qualified plans.
         Notwithstanding the provisions of Section 19.1 (Right to Amend or
         Terminate), the provisions of this Section may not be amended by an
         amendment to the Plan effected within three years following a Change
         in Control.

                                   ARTICLE 20

                             AUTHORIZED TRANSACTION

Cinergy will have the right, authority, and power to transfer some or all of the
assets of the Plan, including contributions and earnings, to a pooled investment
fund of an insurance company qualified to do business in one or more states of
the United States, even though that insurance company might otherwise be a
"party in interest," as that term is defined in ERISA; provided, the insurance
company receives not more than reasonable compensation with respect to the
transaction.

                                   ARTICLE 21

                        PARTICIPATION BY OTHER EMPLOYERS

21.1     ADOPTION OF PLAN

         With Cinergy's consent, any Affiliate may become a participating
         Employer under the Plan by (a) taking appropriate action to adopt the
         Plan, (b) filing with Cinergy a duly certified copy of the Plan as
         adopted by the Affiliate, (c) becoming a party to the trust agreement
         establishing the Trust Fund, and (d) executing and delivering documents
         and taking any other action as may be necessary or desirable to put the
         Plan into effect with respect to it.



                                      99


<PAGE>

21.2     WITHDRAWAL FROM PARTICIPATION

         Any Employer may, with Cinergy's consent, withdraw from participation
         in the Plan at any time by filing with Cinergy a duly certified copy of
         a resolution of its board of directors to that effect and giving notice
         of its intended withdrawal to Cinergy, the Trustee, and Insurance
         Company prior to the effective date of withdrawal. If an Employer
         withdraws from the Plan, Cinergy will determine the portion of the
         Pension Fund held by the Trustee or Insurance Company that is
         applicable to the Participants and former Participants of the
         withdrawing Employer and direct the Trustee and Insurance Company to
         segregate its portion in a separate trust. The separate trust will be
         held and administered as a part of the separate plan of the withdrawn
         Employer. The portion of the Pension Fund applicable to the
         Participants and former Participants of a particular Employer will be
         the sum of:

         (a)      the total amount of the accrued benefits applicable to the
                  Participants and former Participants of the withdrawing
                  Employer, and

         (b)      an amount that bears the same ratio to the excess, if any, of:

                  (1)      the total of the Pension Fund over

                  (2)      the total amount of the accrued benefits applicable
                           to the Participants and former Participants of the
                           withdrawing Employer bears to the total amount of the
                           accrued benefits applicable to all Participants and
                           former Participants.

Notwithstanding the preceding sentence, if the total amount of the present value
of the accrued benefits applicable to the Participants and former Participants
of the withdrawing Employer (when combined with the value of any other assets
segregated during that Plan Year) is less than three percent of the total of the
Pension Fund as of at least one day in the Plan Year during which

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<PAGE>

the withdrawal occurs, the portion of the Pension Fund applicable to the
Participants and former Participants of the withdrawing Employer will be
equal to the present value of those Participants' accrued benefits.

21.3     CINERGY AS AGENT FOR EMPLOYERS

         Each Affiliate that becomes a participating Employer pursuant to
         Section 21.1 (Adoption of Plan) or Article 22 (Continuance by a
         Successor) by so doing will be deemed to have appointed Cinergy its
         agent to exercise on its behalf all of the powers and authorities
         conferred upon Cinergy by the terms of the Plan, including, but not
         limited to the power to amend and terminate the Plan. Cinergy's
         authority to act as agent will continue unless and until the portion of
         the Pension Fund held for the benefit of Employees of the particular
         Employer and their Beneficiaries is set aside in a separate trust as
         provided in Section 21.2 (Withdrawal from Participation). Each Employer
         will, from time to time, upon Cinergy's request, furnish to Cinergy any
         data and information as Cinergy requires in the performance of its
         duties.

                                   ARTICLE 22

                           CONTINUANCE BY A SUCCESSOR

If Cinergy or any other Employer is reorganized by way of merger, consolidation,
transfer of assets, or otherwise, so that a corporation, partnership, or person
other than an Employer succeeds to all or substantially all of the Employer's
business, the successor may be substituted for the Employer under the Plan by
adopting the Plan and becoming a party to the trust agreement. Contributions by
the Employer will be automatically suspended from the effective date of any
reorganization until the date upon which the substitution of the successor
corporation for the Employer under the Plan becomes effective. If, within 90
days following the effective date of any reorganization, the successor does not
elect to become a party to the Plan, or if the Employer adopts a plan of
complete liquidation other than in connection with a reorganization, the Plan
will be automatically terminated with respect to employees of the Employer as of
the

                                     101

<PAGE>

close of business on the 90th day following the effective date of
reorganization or as of the close of business on the date of adoption of a
plan of complete liquidation, as the case may be, and Cinergy will direct the
Trustee to distribute the portion of the Trust Fund applicable to that
Employer in the manner provided in Section 21.2 (Withdrawal from
Participation).

                                   ARTICLE 23

                      PROVISIONS RELATING TO TOP-HEAVY PLAN

23.1     CONSTRUCTION OF THIS SECTION

         This Article will be construed in accordance with Code section 416.

23.2     TOP-HEAVY DETERMINATION

         For each Plan Year, the Committee will determine whether the Plan is a
         Top-Heavy Plan or a Super Top-Heavy Plan.

         (a)      The Plan constitutes a "Top-Heavy Plan" for any Plan Year in
                  which, as of the Determination Date, (1) the Present Value of
                  Accrued Benefits of Key Employees or (2) the sum of the
                  Present Value of Accrued Benefits of Key Employees under the
                  Plan and the Aggregate Accounts of Key Employees under any
                  Qualified Defined Contribution Plan of an Aggregation Group,
                  exceeds 60 percent of the Present Value of Accrued Benefits or
                  the Present Value of Accrued Benefits under the Plan and the
                  Aggregate Accounts of all Participants under any Qualified
                  Defined Contribution Plan of an Aggregation Group.

                  If any Participant is a non-Key Employee for any Plan Year,
                  but the Participant was a Key Employee for any prior Plan
                  Year, the Participant's Present Value of Accrued Benefits
                  and/or Aggregate Account Balance will not be taken into

                                     102

<PAGE>
                  account for purposes of determining whether this Plan is a
                  Top-Heavy Plan (or whether any Aggregation Group that includes
                  this Plan is a Top-Heavy Group)

         (b)      The Plan constitutes a "Super Top-Heavy Plan" for any Plan
                  Year in which, as of the Determination Date, (1) the Present
                  Value of Accrued Benefits of Key Employees or (2) the sum of
                  the Present Value of Accrued Benefits of Key Employees under
                  the Plan and the Aggregate Accounts of Key Employees under any
                  Qualified Defined Contribution Plan of an Aggregation Group,
                  exceeds 90 percent of the Present Value of Accrued Benefits or
                  the Present Value of Accrued Benefits under the Plan and the
                  Aggregate Accounts of all Participants under any Qualified
                  Defined Contribution Plan of an Aggregation Group.

         (c)      Top-Heavy Group means an Aggregation Group in which, as of the
                  Determination Date, the sum of:

                  (1)      the Present Value of Accrued Benefits of Key
                           Employees under all Qualified Defined Benefit Plans
                           included in the group, and

                  (2)      the Aggregate Accounts of Key Employees under
                           Qualified Defined Contribution Plans included in the
                           group,

                  exceeds 60 percent of a similar sum determined for all
                  Participants.

         (d)      In the case of a Permissive Aggregation Group, only a plan
                  that is part of the Required Aggregation Group will be
                  considered a Top-Heavy Plan if the Permissive Aggregation
                  Group is a Top-Heavy Group. No plan in the Permissive
                  Aggregation Group will be considered a Top-Heavy Plan if the
                  Permissive Aggregation Group is not a Top-Heavy Group.

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<PAGE>

         (e)      In the case of a Required Aggregation Group, each plan in the
                  group will be considered a Top-Heavy Plan if the Required
                  Aggregation Group is a Top-Heavy Group.

                                   ARTICLE 24

                               MERGER WITH THE MRP

24.1     ACCEPTANCE OF ASSETS AND LIABILITIES OF MRP TRUST

         As soon as practicable after January 1, 1998 (but not before 30 days
         after the required notification has been filed with the Internal
         Revenue Service), the Trustee will accept a transfer from the trustee
         or funding agent of the MRP of all of the assets and liabilities of the
         trust or insurance or annuity contracts through which the MRP is
         funded.

24.2     PARTICIPATION OF MRP PARTICIPANTS

         Each individual who was a participant in the MRP as of December 31,
         1997, will remain a Participant in the Plan on January 1, 1998. Each
         participant or former participant in the MRP who as of the date of the
         transfer referred to in Section 24.1 (the "Transfer Date") is receiving
         benefits under the MRP or has retired or incurred a severance from
         service with CG&E and has a right to receive future benefits under the
         MRP will be entitled to receive benefits under the Plan as of the
         Transfer Date. A beneficiary entitled to benefits under the MRP as of
         the Transfer Date will become entitled to benefits under the restated
         Plan as of that date. The Annual Pension of a Participant described in
         this Section will at no time be less than the Participant's accrued
         benefit under the MRP as of the Transfer Date.

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<PAGE>

                                   ARTICLE 25

                              SPIN OFF OF PSI PLAN

25.1     ACCEPTANCE OF ASSETS AND LIABILITIES OF PSI PLAN TRUST

         On December 31, 1997, the assets and liabilities attributable to Exempt
         Employees and Non-Exempt Employees who were participants in the PSI
         Plan as of that date were spun off from the PSI Plan. As soon as
         practicable after January 1, 1998 (but not before 30 days after the
         required notification has been filed with the Internal Revenue
         Service), the Trustee will accept a transfer from the trustee or
         funding agent of that spun-off portion of the PSI Plan of all of the
         assets and liabilities of the trust or insurance or annuity contracts
         through which the spun-off portion of the PSI Plan is funded.

25.2     PARTICIPATION OF PSI PLAN PARTICIPANTS

         Each Exempt Employee or Non-Exempt Employee who was a participant in
         the PSI Plan as of December 31, 1997, will become a participant in this
         Plan on January 1, 1998. Each participant or former participant in the
         PSI Plan who as of the date of the transfer referred to in Section 25.1
         (the "PSI Transfer Date") is receiving benefits under the PSI Plan or
         has retired or incurred a severance from service with PSI and has a
         right to receive future benefits under the PSI Plan will become a
         Participant as of the PSI Transfer Date. A beneficiary entitled to
         benefits under the PSI Plan as of the PSI Transfer Date will instead
         become entitled to benefits under this Plan as of that date. The Annual
         Pension of a Participant described in this Section will at no time be
         less than the Participant's accrued benefit under the PSI Plan as of
         the PSI Transfer Date.

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<PAGE>

         Cinergy Corp. has caused this document to be executed by its duly
authorized officers, effective January 1, 1998.

                             By:
                                    ------------------------------------------
                                    Madeleine W. Ludlow
                                    Vice President and Chief Financial Officer

                              Dated:
                                    ------------------------------------------

APPROVED:

---------------------------------
Jerome A. Vennemann
Acting General Counsel
and Assistant Corporate Secretary

Dated:
       --------------------------


                                     106
<PAGE>

                                   ADDENDUM A

                       Cinergy Corp. Non-Union Employees'
                                  Pension Plan

I.       PSI PENSION FORMULAS

         The five remaining basic pension formulas used to determine benefits
         under the PSI Plan are as follows:

         A.       PSI NORMAL RETIREMENT PENSION FORMULA 1

                  The Annual Pension computed under PSI Pension Formula 1 equals
                  (1) 1.1 percent of the Participant's PSI Highest Average
                  Earnings, plus (2) 0.5 percent of the amount by which his PSI
                  Highest Average Earnings exceed his applicable PSI Covered
                  Compensation, multiplied by the number of his Years of
                  Participation accrued as of December 31, 1997, up to a maximum
                  of 35.

         B.       PSI NORMAL RETIREMENT PENSION FORMULA 2

                  The Annual Pension computed under PSI Pension Formula 2 equals
                  the excess of:

                  (1)      1-2/3 percent of the Participant's PSI Highest
                           Average Earnings, multiplied by the number of his
                           Years of Participation not in excess of 30; over

                  (2)      1-2/3 percent of the Participant's Annual Primary
                           Social Security Amount that he is expected to be
                           entitled to receive either at his Normal Retirement
                           Date or at his Disability Date if his disability
                           continues to his Normal Retirement Date, in any event
                           multiplied by the number of his Years of
                           Participation not in excess of 30.

         C.       PSI NORMAL RETIREMENT PENSION FORMULA 3

                  The Annual Pension computed under PSI Pension Formula 3 equals
                  the excess of:

                  (1)      2 percent of the Participant's PSI Highest Average
                           Earnings, multiplied by the number of his Years of
                           Participation not in excess of 25, over

                  (2)      2 percent of the Participant's Annual Primary Social
                           Security Amount that he is expected to be entitled to
                           receive either upon the attainment of age 62 on the
                           assumption that he receives no "wages" or
                           "remuneration," as defined in the Social Security
                           Act, between

                                       1

<PAGE>

                           December 31, 1989 (December 31, 1988, for a Highly
                           Compensated Participant), and his attainment of age
                           62, or if he is still employed by his Employer on or
                           after his attainment of age 62, as of the earlier of
                           December 31, 1989 (December 31, 1988, for a Highly
                           Compensated Participant), or his Normal Retirement
                           Date, or at his Disability Date if his disability
                           continues up until the date otherwise determined
                           under this Paragraph (2), in any event multiplied
                           by the number of his Years of Participation not in
                           excess of 25.

         D.       PSI TERMINATED VESTED PENSION FORMULA 5

                  The Annual Pension computed under PSI Pension Formula 5 equals
                  the excess of:

                  (1)      2 percent of the Participant's PSI Highest Average
                           Earnings, multiplied by the number of his Years of
                           Participation not in excess of 25, over

                  (2)      a fraction, the numerator of which is his actual
                           Years of Participation and the denominator of which
                           is the Years of Participation he would have
                           accumulated at his Normal Retirement Date if during
                           each year after December 31, 1989 (December 31, 1988,
                           for a Highly Compensated Participant), he had
                           completed at least 2,000 Hours of Service, of 50
                           percent of the Participant's Annual Primary Social
                           Security Amount that he is entitled to receive upon
                           the attainment of age 60 on the assumption that his
                           rate of Earnings as of December 31, 1989 (December
                           31, 1988, for a Highly Compensated Participant), had
                           continued unchanged until age 60.

         E.       PSI  TERMINATED VESTED PENSION FORMULA 6

                  The Annual Pension computed under PSI Pension Formula 6 equals
                  the excess of:

                  (1)      1-2/3 percent of the Participant's PSI Highest
                           Average Earnings, multiplied by the number of his
                           Years of Participation not in excess of 30; over

                  (2)      a fraction, the numerator of which is his actual
                           Years of Participation and the denominator of which
                           is the Years of Participation he would have
                           accumulated at his Normal Retirement Date if during
                           each year after December 31, 1989 (December 31, 1988,
                           for a Highly Compensated Participant), he had
                           completed at least 2,000 Hours of Service, of 50
                           percent of the Participant's Annual Primary Social
                           Security Amount that he is entitled to receive upon
                           the attainment of age 60 on the assumption that his
                           rate of Earnings as of

                                       2

<PAGE>

                           December 31, 1989 (December 31, 1988, for a Highly
                           Compensated Participant), had continued unchanged
                           until age 60.

II.      GENERAL METHOD OF COMPUTING ACCRUED BENEFIT UNDER THE PSI PLAN FOR
         NORMAL RETIREMENT

         (a)      Subject to the following provisions of this Section, the
                  amount of the accrued benefit under the PSI Plan as of
                  December 31, 1997, of a Participant who was a participant in
                  the PSI Plan as of December 31, 1997, will be computed under
                  PSI Pension Formula 1.

         (b)      Notwithstanding any other provisions of this Section, the
                  accrued benefit under the PSI Plan as of December 31, 1997, of
                  a Participant who became a participant in the PSI Plan prior
                  to May 1, 1970, will not be less than the amount computed
                  under PSI Pension Formula 3 as of the following date:

                  (1)      December 31, 1989, with respect to an Employee who is
                           not a Highly Compensated Participant; or

                  (2)      December 31, 1988, with respect to a Highly
                           Compensated Participant.

         (c)      Notwithstanding any other provisions of this Section, the
                  accrued benefit under the PSI Plan as of December 31, 1997, of
                  a Participant who became a participant in the PSI Plan on or
                  after May 1, 1970, will not be less than the amount computed
                  under PSI Pension Formula 2 as of the following date:

                  (1)      December 31, 1989, with respect to an Employee who is
                           not a Highly Compensated Participant; or

                  (2)      December 31, 1988, with respect to a Highly
                           Compensated Participant.

III.     PSI DEFINITIONS

         The capitalized terms will have the meanings set forth in the Plan. In
         addition, the following words and phrases have the meanings set forth
         in this Addendum:

         (a)      "Annual Primary Social Security Amount" means, with respect to
                  a Participant, the annual amount available under the
                  provisions of Title II of the Social Security Act as in effect
                  on December 31, 1989 (December 31, 1988, for a Highly
                  Compensated Participant), determined without regard to

                                       3

<PAGE>

                  any increases in benefit levels, wage base increases, or
                  changes in the types of benefits that take effect after that
                  date, but including any recomputation in benefits due solely
                  to the Participant's "wages" and "remuneration," as defined
                  in the Social Security Act, in calendar year 1989 or 1988,
                  whichever is applicable.

         (b)      "Disability Date" means, with respect to a Participant who
                  participated in the PSI Plan, the date the Participant is
                  determined to be totally disabled by reason of a particular
                  disability under PSI's Long Term Disability Plan, as amended
                  from time to time.

         (c)      "Nine Months of Elapsed Time Service" means, with respect to a
                  Participant who participated in the PSI Plan, the nine
                  consecutive month period commencing on his Employment
                  Commencement Date, provided that the Employee does not in that
                  period incur a Severance from Service that is part of a Break
                  in Service; or, the nine consecutive month period commencing
                  on the Employee's Reemployment Commencement Date (or
                  successive Reemployment Commencement Dates), provided that the
                  Employee does not in that period incur a Severance from
                  Service that is part of a Break in Service. If the Employee
                  does not incur a Severance from Service during the applicable
                  nine consecutive month period, then the Employee shall be
                  deemed to have completed Nine Months of Elapsed Time Service
                  as of the last day of the nine consecutive month period.

         (d)      "Normal Retirement Date" means, with respect to each
                  Participant who participated in the PSI Plan, the first day of
                  the calendar month coincident with or following (a) his 65th
                  birthday, or (b) the fifth anniversary date of his employment,
                  whichever is later.

         (e)      "Participation Commencement Date" means, with respect to an
                  Employee who was a participant in the PSI Plan prior to
                  January 1, 1989, the date the Employee became a participant
                  under the PSI Plan's terms as they existed prior to January 1,
                  1990, and with respect to an Employee who was not a
                  participant in the PSI Plan prior to January 1, 1989, the
                  later of (a) January 1, 1989, or (b) the first day of the
                  calendar month coincident with or following the date the
                  Employee first completes Nine Months of Elapsed Time Service
                  and has attained his 21st birthday; provided that on the later
                  date he is classified by his Employer as an Employee. If an
                  Employee has completed Nine Months of Elapsed Time Service and
                  has attained his 21st birthday, but is not classified by his
                  Employer as an Employee on the later date, his "Participation
                  Commencement Date" shall be the first day of the calendar
                  month coincident with or following the first day after the
                  later date on which he is classified by his Employer as an
                  Employee.

         (f)      "PSI Covered Compensation" means, with respect to a
                  Participant who participated in the PSI Plan as of December
                  31, 1997, the average (without indexing) of the annual Social
                  Security taxable

                                       4

<PAGE>

                  wage bases under the Social Security Act for each year during
                  the 35 calendar years ending with the last day of the calendar
                  year in which the Participant attains his Social Security
                  Retirement Age, but no later than December 31, 1997.

         (g)      "PSI Highest Average Earnings" means, with respect to a
                  Participant who participated in the PSI Plan as of December
                  31, 1997, the Participant's highest average annual Earnings
                  for any three consecutive calendar years out of the
                  Participant's 10 or fewer years of participation under the PSI
                  Plan ending on December 31, 1997. If Earnings for any Plan
                  Year beginning before January 1, 1994 are taken into account
                  in determining a Participant's PSI Highest Average Earnings,
                  the Earnings for that Plan Year will be subject to the
                  limitation of Code paragraph 401(a)(17) that was in effect for
                  that Plan Year and the Participant's Nonforfeitable Annual
                  Pension will not be less than the Participant's accrued
                  benefit under the PSI Plan as of December 31, 1993.

         (h)      "Years of Participation" means, with respect to each
                  Participant who participated in the PSI Plan as of December
                  31, 1997, the sum of the following whole and fractional years:

                  (1)      with respect to the period prior to January 1, 1976,
                           the number of years (to the last completed 1/12th
                           year) of his "participating service" (as defined in
                           the PSI Plan as in effect on December 31, 1975,
                           except that the last sentence of Section 1.6 of the
                           PSI Plan will not apply) as of January 1, 1976; plus

                  (2)      with respect to each Plan Year of his participation
                           in the PSI Plan on or after January 1, 1976, and
                           before January 1, 1998 (excluding the Plan Years in
                           which his Participation Commencement Date and his
                           Reemployment Commencement Date, if applicable, occur,
                           to the extent one or both of those dates are on or
                           after January 1, 1976), one Year of Participation if
                           he completes at least 2,000 Hours of Service during
                           that Plan Year; otherwise, a fraction of a Year of
                           Participation, the numerator of which is the number
                           of Hours of Service which he completes during a Plan
                           Year and the denominator of which is 2,000; provided,
                           however, that if he completes less than 1,000 Hours
                           of Service during a Plan Year, no portion of a Year
                           of Participation will be granted; plus

                  (3)      with respect to the Plan Years during which his
                           Participation Commencement Date and/or his
                           Reemployment Commencement Date, if applicable, occur,
                           to the extent one or both of the dates occur on or
                           after January 1, 1976, and before January 1, 1998,
                           either one Year of Participation, or, if the month
                           and day of his Participation Commencement Date or
                           Reemployment Commencement Date within the Plan Year
                           is after January 1, a fraction thereof, the numerator
                           of

                                       5

<PAGE>

                           which is the number of complete calendar months in
                           that Plan Year during which he is a participant in
                           the PSI Plan and the denominator of which is 12.
                           However, if the number of Hours of Service that he
                           completes as a participant in the PSI Plan during the
                           respective Plan Year is less than the product of
                           166-2/3 multiplied by the number of complete calendar
                           months during which he is a participant in the PSI
                           Plan in the Plan Year, then the Year of
                           Participation, or fraction thereof, as otherwise
                           determined pursuant to this Paragraph (c), will be
                           multiplied by the ratio of the number of Hours of
                           Service that he completes as a participant in the PSI
                           Plan during the Plan Year to 166-2/3 multiplied by
                           the number of complete calendar months during which
                           he is a participant in the PSI Plan in the Plan Year.
                           If the number of Hours of Service that he completes
                           as a PSI Plan participant during the Plan Year is
                           less than the product of 83-1/3 multiplied by the
                           number of complete calendar months during which he is
                           a PSI Plan participant in the Plan Year, no portion
                           of a Year of Participation shall be granted.

         With respect to any Plan Year wholly or partially included in a
         calendar year used to calculate the Participant's PSI Plan Highest
         Average Earnings, if the PSI Plan participant fails to complete at
         least 2,000 Hours of Service during that Plan Year, then, in lieu of
         any fraction of a Year of Participation as otherwise determined under
         either Paragraph (b) or Paragraph (c), the PSI Plan participant will be
         granted a fraction of a Year of Participation: the numerator of which
         is equal to the sum of the number of Hours of Service which the PSI
         Plan participant completes as a PSI Plan participant during those
         calendar months of the Plan Year that are not included in that calendar
         year, and the greater of (A) the number of Hours of Service that the
         PSI Plan participant completes during those calendar months of the Plan
         Year that are included in such calendar year or (B) the product of
         166-2/3 multiplied by the number of calendar months of the Plan Year
         that are included in the calendar year; and the denominator of which is
         2,000. A PSI Plan participant's Years of Participation will be
         adjusted, if necessary, pursuant to Section 4.5 (Special Adjustments)
         or Section 4.8 (Benefits Adjustment for Participants Covered by Certain
         Programs) of the PSI Plan.

                                       6
<PAGE>

                                   ADDENDUM B

                 Cinergy Corp. Non-Union Employees' Pension Plan

I.       MRP NORMAL RETIREMENT FORMULA

         A Participant's annual accrued benefit computed under the MRP Normal
         Retirement Formula as of December 31, 1997, equals 1.3 percent of the
         Participant's MRP Final Average Compensation, plus .35 percent of MRP
         Final Average Compensation in excess of MRP Covered Compensation
         multiplied times the Participant's Years of Accredited Service to and
         including 30 years; plus .1 percent of the Participant's MRP Final
         Average Compensation times the Participant's Years of Accredited
         Service in excess of 30 years.

II.      RIP NORMAL RETIREMENT FORMULA

         A Participant's annual accrued benefit computed under the RIP Normal
         Retirement Formula as of December 31, 1997, equals 57 percent of the
         Participant's RIP Final Average Compensation reduced by one-half of his
         or her Primary Social Security Benefit. If the Participant has less
         than 30 Years of Accredited Service as of December 31, 1997, the amount
         will be further reduced by 1/30 for each full year less than 30 years.
         If the Participant has more than 30 Years of Accredited Service as of
         December 31, 1997, the amount will be increased by $6.00 for each Year
         of Accredited Service over 30 years.

III.     MRP AND RIP DEFINITIONS

         For purposes of the MRP and RIP formulas, the capitalized terms will
         have the meanings set forth in the Plan. In addition, the following
         words and phrases will have the meanings set forth in this Addendum:

         (a)      "CG&E Service" means, with respect to an Employee, the period
                  of time during which the employment relationship exists
                  between the Employee and CG&E on or before December 31, 1997,
                  the length of which is determined as follows:

                  (1)      An Employee will be credited with CG&E Service for
                           the period of time beginning with his Employment
                           Commencement Date and ending on December 31, 1997.

                  (2)      An Employee will be credited with CG&E Service for
                           each Period of Credited Severance occurring on or
                           before December 31, 1997.

                                       1

<PAGE>

                  (3)      An Employee will be credited with CG&E Service for
                           any period of service with a related company (as
                           determined under Code subsections 414(b), (c), and
                           (m)), which will be determined as if he had been
                           employed by CG&E during that period.

                  (4)      In determining an Employee's total CG&E Service for
                           purposes of the MRP or RIP, all periods of CG&E
                           Service that are credited to the Employee under
                           Paragraphs (1) through (3) above will be aggregated.
                           In no event will an Employee receive credit more than
                           once for the same period of CG&E Service. For
                           purposes of determining an Employee's total CG&E
                           Service, the Employee will be credited with one month
                           of CG&E Service for each month during which he is
                           credited with at least one Hour of Service. Those
                           total months of CG&E Service will then be rounded up
                           to the next highest number of whole calendar years.

         (b)      "DCIP" means The Cincinnati Gas & Electric Company Deferred
                  Compensation and Investment Plan.

         (c)      "MRP Covered Compensation" means, with respect to a
                  Participant who was a participant in the MRP as of December
                  31, 1997, the average (without indexing) of the annual Social
                  Security taxable wage bases under the Social Security Act for
                  each year during the 35 calendar years ending with the last
                  day of the calendar year in which the Participant attains his
                  Social Security Retirement Age, but no later than December 31,
                  1997.

         (d)      "MRP Final Average Compensation" means, with respect to a
                  Participant who was a participant in the MRP as of December
                  31, 1997, the average of the five consecutive calendar years
                  of compensation as defined in (1) below, that produce the
                  highest average within the 10 calendar years ending on
                  December 31, 1997.

                  (1)      For purposes of this definition, "compensation" means
                           the annual rate of base pay determined on July 1 of
                           each year prior to 1998. For these purposes, base pay
                           is the wage or salary assigned to each specific job
                           title or position. Base pay does not include
                           overtime, bonuses, severance, or any other special
                           pay. Base pay, however, shall include deferred
                           compensation contributions (as that term is defined
                           under the DCIP and SIP) and will also include any
                           other elective contribution made by CG&E to a plan
                           covered by Code section 125, which contribution is
                           not included in the gross income of the MRP
                           participant. If compensation for any Plan Year
                           beginning before January 1, 1994, is taken into
                           account in determining an MRP participant's MRP Final
                           Average Compensation, the compensation for that Plan
                           Year will be subject to the limitation of Code
                           paragraph

                                       2

<PAGE>

                           401(a)(17) that was in effect for that year and the
                           Participant's Nonforfeitable Annual Pension will not
                           be less than the Participant's accrued benefit under
                           the MRP as of December 31, 1993.

                  (2)      For purposes of this definition, an MRP participant's
                           base pay will be converted to an annual rate of
                           compensation using the formula appropriate to the MRP
                           participant's base pay, as follows:

                           (A)      SEMI-MONTHLY RATE. The annual compensation
                                    for an MRP participant paid on a
                                    semi-monthly basis is 24 times the
                                    participant's July 1 semi-monthly base pay.

                           (B)      MONTHLY RATE. The annual compensation for an
                                    MRP participant paid on a monthly basis is
                                    12 times the participant's July 1 monthly
                                    base pay.

                           (C)      HOURLY RATE. The annual compensation for an
                                    MRP participant paid on an hourly basis is
                                    2,080 times the participant's July 1 hourly
                                    base pay.

                           (D)      WEEKLY RATE. The annual compensation for an
                                    MRP participant paid on a weekly basis is 52
                                    times the participant's weekly base pay.

                  (3)      The compensation of an MRP participant who has no
                           salary or wage rate on July 1 of a calendar year
                           because he is on an unpaid leave of absence or
                           temporary suspension will be calculated using his
                           latest rate of pay prior to July 1 of that year, if
                           the MRP participant returns to active employment
                           before his Severance from Service Date. If the MRP
                           participant is on unpaid leave or suspension on July
                           1 of a year, and the participant does not return to
                           active employment before his Severance from Service
                           Date, his compensation for that calendar year will be
                           zero.

         (e)      "Primary Social Security Benefit" means the primary federal
                  old age insurance benefit estimated by the Committee that is,
                  or would be, payable to an RIP participant at age 65 based on
                  the federal Social Security Act in effect on December 31,
                  1997.

                  The Primary Social Security Benefit of an RIP participant who
                  had not attained age 65 by December 31, 1997, will be
                  determined by assuming that he continued to receive
                  compensation after December 31, 1997, at the rate of
                  compensation in effect immediately prior to that, to age 55,
                  and zero compensation from age 55 thereafter until age 65.

                                       3

<PAGE>

                  If an RIP participant was hired after 1950, he will be
                  provided with written notice of his right to supply actual
                  pre-employment earnings history, or the financial consequences
                  of failing to supply such history, and that the RIP
                  participant can obtain his actual earnings history on a
                  year-by-year basis from the Social Security administration.

                  If an RIP participant whose pre-CG&E employment earnings
                  history was estimated supplies documentation from the Social
                  Security administration of his actual year-by-year earnings
                  history, the RIP participant's Primary Social Security Benefit
                  that previously was estimated will be recalculated using
                  actual pre-CG&E employment earnings. Such documentation must
                  be supplied no later than 6 months following the later of:

                  (1)      the date of the RIP participant's termination of
                           employment (by retirement or otherwise), or

                  (2)      the date that the RIP participant is notified of the
                           benefit to which he is entitled.

         (f)      "RIP Final Average Compensation" means, with respect to a
                  Participant who was a participant in the RIP as of December
                  31, 1997, the average of the four consecutive calendar years
                  of compensation, as defined in (1) below, that produce the
                  highest average within the 10 calendar years ending on
                  December 31, 1997.

                  (1)      For purposes of this definition, "compensation" means
                           the annual rate of base pay determined on July 1 of
                           each year prior to 1998. For these purposes, base pay
                           is the wage or salary assigned to each specific job
                           title or position. Base pay does not include
                           overtime, bonuses, severance, or any other special
                           pay. Base pay, however, will include deferred
                           compensation contributions (as that term is defined
                           under the DCIP and SIP) and will also include any
                           other elective contribution made by CG&E to a plan
                           covered by Code section 125, which contribution is
                           not included in the gross income of the RIP
                           participant. If compensation for any Plan Year
                           beginning before January 1, 1994, is taken into
                           account in determining an RIP Participant's RIP Final
                           Average Compensation, the compensation for that Plan
                           Year will be subject to the limitation of Code
                           paragraph 401(a)(17) that was in effect for that year
                           and the Participant's Nonforfeitable Annual Pension
                           will not be less than the Participant's accrued
                           benefit under the RIP as of December 31, 1993.

                  (2)      For purposes of this definition, an RIP participant's
                           base pay will be converted to an annual rate of
                           compensation using the formula appropriate to the
                           participant's base pay, as follows:

                                       4

<PAGE>

                           (A)      SEMI-MONTHLY RATE. The annual compensation
                                    for an RIP participant paid on a
                                    semi-monthly basis is 24 times the
                                    participant's July 1 semi-monthly base pay.

                           (B)      MONTHLY RATE. The annual compensation for an
                                    RIP participant paid on a monthly basis is
                                    12 times the participant's July 1 monthly
                                    base pay.

                           (C)      HOURLY RATE. The annual compensation for an
                                    RIP participant paid on an hourly basis is
                                    2,080 times the participant's July 1 hourly
                                    base pay.

                           (D)      WEEKLY RATE. The annual compensation for an
                                    RIP participant paid on a weekly basis is 52
                                    times the participant's weekly base pay.

                  (3)      The compensation of an RIP participant who has no
                           salary or wage rate on July 1 of a calendar year
                           because he is on an unpaid leave of absence or
                           temporary suspension will be calculated using his
                           latest rate of pay prior to July 1 of that year, if
                           the RIP participant returns to active employment
                           before his Severance from Service Date. If the RIP
                           participant is on unpaid leave or suspension on July
                           1 of a year, and the participant does not return to
                           active employment before his Severance from Service
                           Date, his compensation for that calendar year will be
                           zero.

         (g)      "SIP" means The Cincinnati Gas & Electric Company Savings
                  Incentive Plan.

(h)      "Years of Accredited Service" means the number of years equal to the
         length of the Employee's CG&E Service on or before December 31, 1997,
         during which the Employee is treated as a participant in the MRP or
         RIP. The calculation of an Employee's Years of Accredited Service will
         begin on the first day of the month during which the Employee became
         eligible to participate in the MRP or the RIP.

                                       5

<PAGE>

                                   ADDENDUM C

              MRP/RIP 100% Spousal and Contingent Annuitant Benefit

<TABLE>
<CAPTION>
        NUMBER OF FULL YEARS                                         NUMBER OF FULL YEARS
           THE SPOUSE OR                                                 THE SPOUSE OR
        CONTINGENT ANNUITANT                                         CONTINGENT ANNUITANT
              WAS BORN                                                     WAS BORN
       AFTER THE PARTICIPANT                 FACTOR                  AFTER THE PARTICIPANT               FACTOR
       ---------------------                 ------                  ---------------------               ------
       <S>                                   <C>                     <C>                                 <C>
                 0                            .911                            20                          .861
                 1                            .908                            21                          .859
                 2                            .905                            22                          .858
                 3                            .902                            23                          .856
                 4                            .899                            24                          .855
                 5                            .896                            25                          .853
                 6                            .893                            26                          .852
                 7                            .890                            27                          .851
                 8                            .887                            28                          .850
                 9                            .885                            29                          .849
                 10                           .882                            30                          .848
                 11                           .880                            31                          .847
                 12                           .877                            32                          .846
                 13                           .875                            33                          .845
                 14                           .872                            34                          .844
                 15                           .870                            35                          .844
                 16                           .868                            36                          .843
                 17                           .866                            37                          .842
                 18                           .864                            28                          .842
                 19                           .863                            39                          .841
                                                                              40                          .841
</TABLE>

                                       1

<PAGE>

<TABLE>
<CAPTION>
        NUMBER OF FULL YEARS                                         NUMBER OF FULL YEARS
           THE SPOUSE OR                                                 THE SPOUSE OR
        CONTINGENT ANNUITANT                                         CONTINGENT ANNUITANT
          WAS BORN BEFORE                                               WAS BORN BEFORE
       THE PRIMARY ANNUITANT                 FACTOR                  THE PRIMARY ANNUITANT               FACTOR
       ---------------------                 ------                  ---------------------               ------
       <S>                                   <C>                     <C>                                 <C>
                 0                            .911                            20                          .973
                 1                            .915                            21                          .975
                 2                            .918                            22                          .977
                 3                            .922                            23                          .979
                 4                            .925                            24                          .981
                 5                            .928                            25                          .982
                 6                            .932                            26                          .984
                 7                            .935                            27                          .985
                 8                            .939                            28                          .986
                 9                            .942                            29                          .987
                 10                           .945                            30                          .988
                 11                           .949
                 12                           .952
                 13                           .955
                 14                           .958
                 15                           .961
                 16                           .963
                 17                           .966
                 18                           .968
                 19                           .971

</TABLE>

Morality:   1971 TPF&C Forecast Mortality Table (Employee rate based on
            85% male; Contingent Annuitant rate based on 85% female)
Interest:   7.5%
Subsidy:    Factors include a 50% subsidy provided by the Company
Effective:  January 1, 1984

                                       2
<PAGE>

                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors

                       PENSIONER WHOSE RETIREMENT AGE IS:
<TABLE>
<CAPTION>

  BENEFICIARY'S                                                                                               BENEFICIARY'S
     AGE AT                                                                                                      AGE AT
   PENSIONER'S                                                                                                 PENSIONER'S
   RETIREMENT      25    26    27    28   29    30    31    32    33   34    35    36    37     38   39    40  RETIREMENT
---------------- ----- ----- ----- ----- ---- ----- ----- ----- ----- ----- ----- ----- ----- ----- ---- ----- ------------
<S>              <C>   <C>   <C>   <C>   <C>  <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>  <C>  <C>
       20        .985  .984  .982  .981  .979  .978  .976  .974  .972  .970  .967  .965  .962  .959  .956 .952     20
       21        .985  .984  .983  .981  .980  .978  .976  .974  .972  .970  .968  .965  .962  .959  .956 .952     21
       22        .985  .984  .983  .982  .980  .979  .977  .975  .973  .971  .968  .966  .963  .960  .957 .953     22
       23        .986  .985  .983  .982  .981  .979  .977  .975  .973  .971  .969  .966  .964  .961  .958 .954     23
       24        .986  .985  .984  .982  .981  .979  .978  .976  .974  .972  .969  .967  .964  .961  .958 .954     24

       25        .987  .985  .984  .983  .981  .980  .978  .976  .974  .972  .970  .968  .965  .962  .959 .955     25
       26        .987  .986  .985  .983  .982  .980  .979  .977  .975  .973  .971  .968  .966  .963  .960 .955     26
       27        .987  .986  .985  .984  .982  .981  .979  .977  .976  .974  .971  .969  .966  .963  .960 .956     27
       28        .988  .987  .985  .984  .983  .981  .980  .978  .976  .974  .972  .970  .967  .964  .961 .957     28
       29        .988  .987  .986  .985  .983  .982  .980  .979  .977  .975  .973  .970  .968  .965  .962 .957     29

       30        .988  .987  .986  .985  .984  .982  .981  .979  .977  .975  .973  .971  .968  .966  .963 .958     30
       31        .989  .988  .987  .986  .984  .983  .981  .980  .978  .976  .974  .972  .969  .967  .964 .959     31
       32        .989  .988  .987  .986  .985  .983  .982  .980  .979  .977  .975  .972  .970  .967  .965 .960     32
       33        .989  .989  .988  .986  .985  .984  .983  .981  .979  .977  .975  .973  .971  .968  .965 .960     33
       34        .990  .989  .988  .987  .986  .984  .983  .982  .980  .978  .976  .974  .972  .969  .966 .961     34

       35        .990  .989  .988  .987  .986  .985  .984  .982  .981  .979  .977  .975  .972  .970  .967 .962     35
       36        .991  .990  .989  .988  .987  .985  .984  .983  .981  .979  .978  .976  .973  .971  .968 .963     36
       37        .991  .990  .989  .988  .987  .986  .985  .983  .982  .980  .978  .976  .974  .972  .969 .964     37
       38        .991  .990  .990  .989  .988  .987  .985  .984  .982  .981  .979  .977  .975  .973  .970 .965     38
       39        .992  .991  .990  .989  .988  .987  .986  .985  .983  .982  .980  .978  .976  .974  .971 .966     39
</TABLE>


                                      1


<PAGE>


                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors
                       PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>

  BENEFICIARY'S                                                                                                  BENEFICIARY'S
     AGE AT                                                                                                         AGE AT
   PENSIONER'S                                                                                                    PENSIONER'S
   RETIREMENT     25    26    27    28    29    30    31    32    33    34    35    36    37    38    39    40    RETIREMENT
<S>              <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>
       40        .992  .991  .990  .990  .989  .988  .986  .985  .984  .982  .981  .979  .977  .974  .972  .967       40
       41        .992  .992  .991  .990  .989  .988  .987  .986  .984  .983  .981  .979  .978  .975  .973  .968       41
       42        .993  .992  .991  .990  .990  .989  .987  .986  .985  .984  .982  .980  .978  .976  .974  .968       42
       43        .993  .992  .992  .991  .990  .989  .988  .987  .986  .984  .983  .981  .979  .977  .975  .969       43
       44        .993  .993  .992  .991  .990  .990  .989  .987  .986  .985  .983  .982  .980  .978  .976  .970       44

       45        .994  .993  .992  .992  .991  .990  .989  .988  .987  .986  .984  .983  .981  .979  .977  .971       45
       46        .994  .993  .993  .992  .991  .990  .990  .989  .987  .986  .985  .983  .982  .980  .978  .972       46
       47        .994  .994  .993  .992  .992  .991  .990  .989  .988  .987  .986  .984  .983  .981  .979  .973       47
       48        .994  .994  .993  .993  .992  .991  .991  .990  .989  .987  .986  .985  .983  .982  .980  .974       48
       49        .995  .994  .994  .993  .992  .992  .991  .990  .989  .988  .987  .986  .984  .983  .981  .975       49

       50        .995  .994  .994  .993  .993  .992  .991  .991  .990  .989  .988  .986  .985  .983  .982  .976       50
       51        .995  .995  .994  .994  .993  .993  .992  .991  .990  .989  .988  .987  .986  .984  .983  .977       51
       52        .995  .995  .995  .994  .994  .993  .992  .992  .991  .990  .989  .988  .986  .985  .983  .978       52
       53        .996  .995  .995  .994  .994  .993  .993  .992  .991  .990  .989  .988  .987  .986  .984  .979       53
       54        .996  .996  .995  .995  .994  .994  .993  .992  .992  .991  .990  .989  .988  .986  .985  .980       54
---------------  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ------------
                  25    26    27    28    29    30    31    32    33    34    35    36    37    38    39    40
</TABLE>
                       PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:        1971 TPF&C Forecast Mortality Table (Pensioner rate based on
                  85% male; Beneficiary rate based on 85%
female)
Interest Rate:    7.5%
Effective:        January 1, 1984
Prepared by:      Towers Perrin


                                      2


<PAGE>


                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors
                       PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>

  BENEFICIARY'S                                                                                                    BENEFICIARY'S
     AGE AT                                                                                                           AGE AT
   PENSIONER'S                                                                                                      PENSIONER'S
   RETIREMENT       25    26    27    28    29    30    31    32    33    34    35    36    37    38    39    40    RETIREMENT
----------------   ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------------
<S>                <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>
       55          .996  .996  .995  .995  .995  .994  .994  .993  .992  .991  .991  .990  .988  .987  .986  .981       55
       56          .996  .996  .996  .995  .995  .994  .994  .993  .993  .992  .991  .990  .989  .988  .987  .982       56
       57          .997  .996  .996  .996  .995  .995  .994  .994  .993  .992  .992  .991  .990  .989  .987  .983       57
       58          .997  .996  .996  .996  .995  .995  .995  .994  .994  .993  .992  .991  .990  .989  .988  .984       58
       59          .997  .997  .996  .996  .996  .995  .995  .994  .994  .993  .993  .992  .991  .990  .989  .985       59

       60          .997  .997  .997  .996  .996  .996  .995  .995  .994  .994  .993  .992  .992  .991  .990  .985       60
       61          .997  .997  .997  .997  .996  .996  .996  .995  .995  .994  .994  .993  .992  .991  .990  .986       61
       62          .997  .997  .997  .997  .997  .996  .996  .995  .995  .995  .994  .993  .993  .992  .991  .987       62
       63          .998  .997  .997  .997  .997  .997  .996  .996  .995  .995  .994  .994  .993  .992  .992  .988       63
       64          .998  .998  .997  .997  .997  .997  .996  .996  .996  .995  .995  .994  .994  .993  .992  .989       64

       65          .998  .998  .998  .997  .997  .997  .997  .996  .996  .996  .995  .995  .994  .993  .993  .989       65
       66          .998  .998  .998  .998  .997  .997  .997  .997  .996  .996  .996  .995  .995  .994  .993  .990       66
       67          .998  .998  .998  .998  .998  .997  .997  .997  .997  .996  .996  .995  .995  .994  .994  .991       67
       68          .998  .998  .998  .998  .998  .998  .997  .997  .997  .997  .996  .996  .995  .995  .994  .991       68
       69          .998  .998  .998  .998  .998  .998  .998  .997  .997  .997  .997  .996  .996  .995  .995  .992       69

       70          .999  .998  .998  .998  .998  .998  .998  .998  .997  .997  .997  .996  .996  .996  .995  .992       70
       71          .999  .999  .999  .998  .998  .998  .998  .998  .998  .997  .997  .997  .996  .996  .996  .993       71
       72          .999  .999  .999  .999  .998  .998  .998  .998  .998  .998  .997  .997  .997  .996  .996  .994       72
       73          .999  .999  .999  .999  .999  .998  .998  .998  .998  .998  .998  .997  .997  .997  .996  .994       73
       74          .999  .999  .999  .999  .999  .999  .998  .998  .998  .998  .998  .997  .997  .997  .997  .995       74


                                      3


<PAGE>


                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors
                       PENSIONER WHOSE RETIREMENT AGE IS:

  BENEFICIARY'S                                                                                                      BENEFICIARY'S
     AGE AT                                                                                                              AGE AT
   PENSIONER'S                                                                                                         PENSIONER'S
   RETIREMENT       25     26     27     28    29    30    31    32    33    34    35    36    37    38    39    40    RETIREMENT
       75          .999   .999   .999   .999  .999  .999  .999  .998  .998  .998  .998  .998  .997  .997  .997  .995       75
       76          .999   .999   .999   .999  .999  .999  .999  .999  .998  .998  .998  .998  .998  .997  .997  .995       76
       77          .999   .999   .999   .999  .999  .999  .999  .999  .999  .998  .998  .998  .998  .998  .997  .996       77
       78          .999   .999   .999   .999  .999  .999  .999  .999  .999  .999  .998  .998  .998  .998  .998  .996       78
       79          .999   .999   .999   .999  .999  .999  .999  .999  .999  .999  .999  .998  .998  .998  .998  .996       79

       80          .999   .999   .999   .999  .999  .999  .999  .999  .999  .999  .999  .999  .998  .998  .998  .997       80
       81          .999   .999   .999   .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .998  .998  .997       81
       82          .999   .999   .999   .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .998  .997       82
       83          .999   .999   .999   .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .998       83
       84          .999   .999   .999   .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .998       84

       85          .999   .999   .999   .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .998       85
       86          .999   .999   .999   .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .998       86
       87         1.000   .999   .999   .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .998       87
       88         1.000  1.000   .999   .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .998       88
       89         1.000  1.000  1.000  1.000  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999  .999       89
---------------   -----  -----  -----  -----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ---- ------------
                     25     26     27     28    29    30    31    32    33    34    35    36    37    38    39    40
</TABLE>
                       PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:        1971 TPF&C Forecast Mortality Table (Pensioner rate based on
                  85% male; Beneficiary rate based on
85% female)
Interest Rate:    7.5%
Effective:        January 1, 1984
Prepared by:      Towers Perrin



                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors
                       PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>

  BENEFICIARY'S                                                                                                     BENEFICIARY'S
     AGE AT                                                                                                           AGE AT
   PENSIONER'S                                                                                                       PENSIONER'S
   RETIREMENT     40    41    42    43    44    45    46    46    48    49    50    51    52    53    54     55      RETIREMENT
---------------- ----  ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------- --------------
<S>              <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>     <C>
       20        .952  .948  .945  .941  .936  .932  .927  .922  .917  .911  .905  .899  .893  .886  .879   .872         20



                                      4


<PAGE>


       21        .952  .949  .945  .941  .937  .932  .928  .923  .917  .912  .906  .900  .894  .887  .880   .873         21
       22        .953  .949  .946  .942  .937  .933  .928  .923  .918  .912  .907  .901  .894  .888  .881   .873         22
       23        .954  .950  .946  .942  .938  .933  .929  .924  .919  .913  .907  .901  .895  .888  .881   .874         23
       24        .954  .951  .947  .943  .939  .934  .929  .924  .919  .914  .908  .902  .896  .889  .882   .875         24

       25        .955  .951  .947  .943  .939  .935  .930  .925  .920  .914  .909  .903  .896  .890  .883   .876         25
       26        .955  .952  .948  .944  .940  .936  .931  .926  .921  .915  .910  .904  .897  .891  .884   .877         26
       27        .956  .953  .949  .945  .941  .936  .932  .927  .922  .916  .910  .904  .898  .892  .885   .878         27
       28        .957  .953  .950  .946  .941  .937  .932  .928  .922  .917  .911  .905  .899  .893  .886   .878         28
       29        .957  .954  .950  .946  .942  .938  .933  .928  .923  .918  .912  .906  .900  .894  .887   .879         29

       30        .958  .955  .951  .947  .943  .939  .934  .929  .924  .919  .913  .907  .901  .895  .888   .881         30
       31        .959  .955  .952  .948  .944  .940  .935  .930  .925  .920  .914  .908  .902  .896  .889   .882         31
       32        .960  .956  .953  .949  .945  .941  .936  .931  .926  .921  .915  .909  .903  .897  .890   .883         32
       33        .960  .957  .954  .950  .946  .942  .937  .932  .927  .922  .916  .911  .904  .898  .891   .884         33
       34        .961  .958  .954  .951  .947  .943  .938  .933  .928  .923  .918  .912  .906  .899  .893   .885         34

       35        .962  .959  .955  .952  .948  .944  .939  .934  .929  .924  .919  .913  .907  .901  .894   .887         35
       36        .963  .960  .956  .953  .949  .945  .940  .936  .931  .926  .920  .914  .908  .902  .895   .888         36
       37        .964  .961  .957  .954  .950  .946  .941  .937  .932  .927  .921  .916  .910  .903  .897   .890         37
       38        .965  .962  .958  .955  .951  .947  .943  .938  .933  .928  .923  .917  .911  .905  .898   .891         38
       39        .966  .963  .959  .956  .952  .948  .944  .939  .935  .929  .924  .919  .913  .906  .900   .893         39






                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors
                       PENSIONER WHOSE RETIREMENT AGE IS:

  BENEFICIARY'S                                                                                                    BENEFICIARY'S
     AGE AT                                                                                                           AGE AT
   PENSIONER'S                                                                                                      PENSIONER'S
   RETIREMENT      25    26    27    28    29    30    31    32    33    34    35    36    37    38    39     40    RETIREMENT

       40         .967  .964  .960  .957  .953  .949  .945  .941  .936  .931  .926  .920  .914  .908  .902   .895       40
       41         .968  .965  .961  .958  .954  .950  .946  .942  .937  .932  .927  .922  .916  .910  .903   .897       41
       42         .968  .966  .963  .959  .956  .952  .948  .943  .939  .934  .929  .923  .918  .912  .905   .898       42
       43         .969  .967  .964  .960  .957  .953  .949  .945  .940  .935  .930  .925  .919  .913  .907   .900       43
       44         .970  .968  .965  .961  .958  .954  .950  .946  .942  .937  .932  .927  .921  .915  .909   .902       44

       45         .971  .969  .966  .963  .959  .956  .952  .948  .943  .939  .934  .929  .923  .917  .911   .904       45



                                      5


<PAGE>


       46         .972  .970  .967  .964  .961  .957  .953  .949  .945  .940  .935  .930  .925  .919  .913   .907       46
       47         .973  .971  .968  .965  .962  .958  .955  .951  .946  .942  .937  .932  .927  .921  .915   .909       47
       48         .974  .972  .969  .966  .963  .960  .956  .952  .948  .944  .939  .934  .929  .923  .917   .911       48
       49         .975  .973  .970  .968  .964  .961  .958  .954  .950  .945  .941  .936  .931  .925  .920   .913       49

       50         .976  .974  .972  .969  .966  .963  .959  .955  .951  .947  .943  .938  .933  .928  .922   .916       50
       51         .977  .975  .973  .970  .967  .964  .961  .957  .953  .949  .945  .940  .935  .930  .924   .918       51
       52         .978  .976  .974  .971  .968  .965  .962  .959  .955  .951  .947  .942  .937  .932  .926   .921       52
       53         .979  .977  .975  .972  .970  .967  .964  .960  .957  .953  .948  .944  .939  .934  .929   .923       53
       54         .980  .978  .976  .974  .971  .968  .965  .962  .958  .954  .950  .946  .941  .937  .931   .926       54
---------------- ------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ---- ------- -------------
                   40    41    42    43    44    45    46    47    48    49    50    51    52    53    54     55
</TABLE>

                       PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:        1971 TPF&C Forecast Mortality Table (Pensioner rate based on
                  85% male; Beneficiary rate based on
85% female)
Interest Rate:    7.5%
Effective:        January 1, 1984
Prepared by:      Towers Perrin




                                      6


<PAGE>


                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors
                       PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>

  BENEFICIARY'S                                                                                                    BENEFICIARY'S
     AGE AT                                                                                                           AGE AT
   PENSIONER'S                                                                                                      PENSIONER'S
   RETIREMENT     40    41    42    43    44    45    46    47    48    49    50    51    52    53    54    55      RETIREMENT
---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------ --------------
<S>              <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>
       55        .981  .979  .977  .975  .972  .969  .966  .963  .960  .956  .952  .948  .944  .939  .934  .928         55
       56        .982  .980  .978  .976  .973  .971  .968  .965  .962  .958  .954  .950  .946  .941  .936  .931         56
       57        .983  .981  .979  .977  .975  .972  .969  .966  .963  .960  .956  .952  .948  .943  .939  .933         57
       58        .984  .982  .980  .978  .976  .973  .971  .968  .965  .962  .958  .954  .950  .946  .941  .936         58
       59        .985  .983  .981  .979  .977  .975  .972  .969  .966  .963  .960  .956  .952  .948  .943  .939         59

       60        .985  .984  .982  .980  .978  .976  .974  .971  .968  .965  .962  .958  .954  .950  .946  .941         60
       61        .986  .985  .983  .981  .979  .977  .975  .972  .970  .967  .964  .960  .957  .953  .948  .944         61
       62        .987  .986  .984  .982  .981  .978  .976  .974  .971  .968  .965  .962  .959  .955  .951  .946         62
       63        .988  .987  .985  .983  .982  .980  .978  .975  .973  .970  .967  .964  .961  .957  .953  .949         63
       64        .989  .987  .986  .984  .983  .981  .979  .977  .974  .972  .969  .966  .963  .959  .956  .952         64

       65        .989  .988  .987  .985  .984  .982  .980  .978  .976  .973  .971  .968  .965  .961  .958  .954         65
       66        .990  .989  .988  .986  .985  .983  .981  .979  .977  .975  .972  .970  .967  .964  .960  .957         66
       67        .991  .990  .988  .987  .986  .984  .982  .981  .979  .976  .974  .971  .969  .966  .962  .959         67
       68        .991  .990  .989  .988  .987  .985  .984  .982  .980  .978  .976  .973  .971  .968  .965  .961         68
       69        .992  .991  .990  .989  .988  .986  .985  .983  .981  .979  .977  .975  .972  .970  .967  .964         69

       70        .992  .992  .991  .990  .988  .987  .986  .984  .982  .981  .979  .976  .974  .972  .969  .966         70
       71        .993  .992  .991  .990  .989  .988  .987  .985  .984  .982  .980  .978  .976  .974  .971  .968         71
       72        .994  .993  .992  .991  .990  .989  .988  .986  .985  .983  .981  .980  .978  .975  .973  .970         72
       73        .994  .993  .993  .992  .991  .990  .988  .987  .986  .984  .983  .981  .979  .977  .975  .972         73
       74        .995  .994  .993  .992  .991  .990  .989  .988  .987  .985  .984  .982  .981  .979  .977  .974         74



                                      7


<PAGE>


                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors
                       PENSIONER WHOSE RETIREMENT AGE IS:

  BENEFICIARY'S                                                                                                   BENEFICIARY'S
     AGE AT                                                                                                          AGE AT
   PENSIONER'S                                                                                                     PENSIONER'S
   RETIREMENT      40    41    42    43    44    45    46    47    48    49    50    51    52    53    54    55    RETIREMENT

       75         .995  .994  .994  .993  .992  .991  .990  .989  .988  .987  .985  .984  .982  .980  .978  .976        75
       76         .995  .995  .994  .993  .993  .992  .991  .990  .989  .988  .986  .985  .983  .982  .980  .978        76
       77         .996  .995  .995  .994  .993  .992  .992  .991  .990  .988  .987  .986  .985  .983  .981  .979        77
       78         .996  .996  .995  .994  .994  .993  .992  .991  .990  .989  .988  .987  .986  .984  .983  .981        78
       79         .996  .996  .995  .995  .994  .994  .993  .992  .991  .990  .989  .988  .987  .985  .984  .982        79

       80         .997  .996  .996  .995  .995  .994  .993  .993  .992  .991  .990  .989  .988  .987  .985  .984        80
       81         .997  .997  .996  .996  .995  .995  .994  .993  .993  .992  .991  .990  .989  .988  .986  .985        81
       82         .997  .997  .997  .996  .996  .995  .995  .994  .993  .992  .992  .991  .990  .989  .988  .986        82
       83         .998  .997  .997  .996  .996  .996  .995  .994  .994  .993  .992  .992  .991  .990  .989  .987        83
       84         .998  .997  .997  .997  .996  .996  .995  .995  .994  .994  .993  .992  .991  .991  .990  .989        84

       85         .998  .998  .997  .997  .997  .996  .996  .995  .995  .994  .994  .993  .992  .991  .990  .990        85
       86         .998  .998  .998  .997  .997  .997  .996  .996  .995  .995  .994  .994  .993  .992  .991  .990        86
       87         .998  .998  .998  .998  .997  .997  .997  .996  .996  .995  .995  .994  .993  .993  .992  .991        87
       88         .998  .998  .998  .998  .998  .997  .997  .997  .996  .996  .995  .995  .994  .993  .993  .992        88
       89         .999  .998  .998  .998  .998  .997  .997  .997  .996  .996  .996  .995  .995  .994  .993  .993        89
----------------  ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------------
                   40    41    42    43    44    45    46    47    48    49    50    51    52    53    54    55
</TABLE>
                       PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:        1971 TPF&C Forecast Mortality Table (Pensioner rate based on
                  85% male; Beneficiary rate based on
85% female)
Interest Rate:    7.5%
Effective:        January 1, 1984
Prepared by:      Towers Perrin



                                      8

<PAGE>


                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors
                       PENSIONER WHOSE RETIREMENT AGE IS:
<TABLE>
<CAPTION>

  BENEFICIARY'S                                                                                                  BENEFICIARY'S
     AGE AT                                                                                                          AGE AT
   PENSIONER'S                                                                                                     PENSIONER'S
   RETIREMENT     55    56    57    58    59    60    61    62    63    64    65    66    67    68    69    70     RETIREMENT
---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -------------
<S>              <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>

       20        .872  .864  .856  .848  .839  .829  .819  .809  .798  .786  .774  .762  .749  .735  .722  .708        20
       21        .873  .865  .857  .849  .839  .830  .820  .810  .799  .787  .775  .762  .749  .736  .722  .708        21
       22        .873  .866  .858  .849  .840  .831  .821  .810  .799  .788  .776  .763  .750  .737  .723  .709        22
       23        .874  .867  .858  .850  .841  .831  .821  .811  .800  .788  .776  .764  .751  .737  .724  .710        23
       24        .875  .867  .859  .851  .842  .832  .822  .812  .801  .789  .777  .765  .752  .738  .725  .711        24

       25        .876  .868  .860  .852  .843  .833  .823  .813  .802  .790  .778  .765  .752  .739  .725  .712        25
       26        .877  .869  .861  .852  .843  .834  .824  .814  .803  .791  .779  .766  .753  .740  .726  .712        26
       27        .878  .870  .862  .853  .844  .835  .825  .815  .804  .792  .780  .767  .754  .741  .727  .713        27
       28        .878  .871  .863  .854  .845  .836  .826  .816  .805  .793  .781  .768  .755  .742  .728  .715        28
       29        .879  .872  .864  .855  .847  .837  .827  .817  .806  .794  .782  .770  .757  .743  .730  .716        29

       30        .881  .873  .865  .857  .848  .838  .828  .818  .807  .795  .783  .771  .758  .744  .731  .717        30
       31        .882  .874  .866  .858  .849  .839  .830  .819  .808  .797  .785  .772  .759  .746  .732  .718        31
       32        .883  .875  .867  .859  .850  .841  .831  .820  .810  .798  .786  .773  .760  .747  .733  .719        32
       33        .884  .877  .869  .860  .851  .842  .832  .822  .811  .799  .787  .775  .762  .748  .735  .721        33
       34        .885  .878  .870  .862  .853  .844  .834  .823  .812  .801  .789  .776  .763  .750  .736  .722        34

       35        .887  .879  .872  .863  .854  .845  .835  .825  .814  .802  .790  .778  .765  .752  .738  .724        35
       36        .888  .881  .873  .865  .856  .847  .837  .826  .816  .804  .792  .780  .767  .753  .740  .726        36
       37        .890  .882  .875  .866  .858  .848  .839  .828  .817  .806  .794  .781  .768  .755  .742  .728        37
       38        .891  .884  .876  .868  .859  .850  .840  .830  .819  .808  .796  .783  .770  .757  .743  .730        38
       39        .893  .886  .878  .870  .861  .852  .842  .832  .821  .810  .798  .785  .772  .759  .746  .732        39




                                      9


<PAGE>


                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors
                       PENSIONER WHOSE RETIREMENT AGE IS:

<CAPTION>

  BENEFICIARY'S                                                                                                   BENEFICIARY'S
     AGE AT                                                                                                          AGE AT
   PENSIONER'S                                                                                                     PENSIONER'S
   RETIREMENT     55    56    57    58    59    60    61    62    63    64    65    66    67    68    69    70     RETIREMENT
<S>              <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>

       40        .895  .888  .880  .872  .863  .854  .844  .834  .823  .812  .800  .787  .775  .761  .748  .734       40
       41        .897  .889  .882  .874  .865  .856  .846  .836  .825  .814  .802  .790  .777  .764  .750  .736       41
       42        .898  .891  .884  .876  .867  .858  .848  .838  .828  .816  .804  .792  .779  .766  .752  .739       42
       43        .900  .893  .886  .878  .869  .860  .851  .841  .830  .819  .807  .794  .782  .769  .755  .741       43
       44        .902  .895  .888  .880  .872  .863  .853  .843  .832  .821  .809  .797  .784  .771  .758  .744       44

       45        .904  .897  .890  .882  .874  .865  .856  .846  .835  .824  .812  .800  .787  .774  .761  .747       45
       46        .907  .900  .892  .885  .876  .867  .858  .848  .838  .827  .815  .803  .790  .777  .763  .750       46
       47        .909  .902  .895  .887  .879  .870  .861  .851  .841  .829  .818  .806  .793  .780  .767  .753       47
       48        .911  .904  .897  .890  .881  .873  .864  .854  .843  .832  .821  .809  .796  .783  .770  .756       48
       49        .913  .907  .900  .892  .884  .876  .866  .857  .847  .836  .824  .812  .800  .787  .773  .760       49

       50        .916  .909  .902  .895  .887  .878  .869  .860  .850  .839  .827  .815  .803  .790  .777  .763       50
       51        .918  .912  .905  .898  .890  .881  .872  .863  .853  .842  .831  .819  .807  .794  .781  .767       51
       52        .921  .914  .908  .900  .893  .884  .876  .866  .856  .846  .834  .823  .810  .798  .784  .771       52
       53        .923  .917  .910  .903  .896  .888  .879  .870  .860  .849  .838  .826  .814  .801  .788  .775       53
       54        .926  .920  .913  .906  .899  .891  .882  .873  .863  .853  .842  .830  .818  .806  .793  .779       54
---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -------------
                  55    56    57    58    59    60    61    62    63    64    65    66    67    68    69    70
</TABLE>


                       PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:        1971 TPF&C Forecast Mortality Table (Pensioner rate based on
                  85% male; Beneficiary rate based on 85% female)
Interest Rate:    7.5%
Effective:        January 1, 1984
Prepared by:      Towers Perrin





                                      10


<PAGE>


                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors
                       PENSIONER WHOSE RETIREMENT AGE IS:
<TABLE>
<CAPTION>

  BENEFICIARY'S                                                                                                   BENEFICIARY'S
     AGE AT                                                                                                          AGE AT
   PENSIONER'S                                                                                                     PENSIONER'S
   RETIREMENT     55    56    57    58    59    60    61    62    63    64    65    66    67    68    69    70     RETIREMENT
---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- --------------
<S>              <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>
       55        .928  .922  .916  .909  .902  .894  .885  .876  .867  .857  .846  .834  .822  .810  .797  .784        55
       56        .931  .925  .919  .912  .905  .897  .889  .880  .871  .860  .850  .838  .826  .814  .801  .788        56
       57        .933  .928  .922  .915  .908  .901  .892  .884  .874  .864  .854  .842  .831  .819  .806  .793        57
       58        .936  .931  .925  .918  .911  .904  .896  .887  .878  .868  .858  .847  .835  .823  .811  .798        58
       59        .939  .933  .928  .921  .915  .907  .900  .891  .882  .873  .862  .851  .840  .828  .816  .803        59

       60        .941  .936  .931  .924  .918  .911  .903  .895  .886  .877  .867  .856  .845  .833  .821  .808        60
       61        .944  .939  .933  .928  .921  .914  .907  .899  .890  .881  .871  .860  .849  .838  .826  .813        61
       62        .946  .942  .936  .931  .925  .918  .911  .903  .894  .885  .876  .865  .854  .843  .831  .819        62
       63        .949  .944  .939  .934  .928  .921  .914  .907  .899  .890  .880  .870  .859  .848  .836  .824        63
       64        .952  .947  .942  .937  .931  .925  .918  .911  .903  .894  .885  .875  .864  .854  .842  .830        64

       65        .954  .950  .945  .940  .935  .929  .922  .915  .907  .899  .890  .880  .870  .859  .848  .836        65
       66        .957  .953  .948  .943  .938  .932  .926  .919  .911  .903  .894  .885  .875  .865  .854  .842        66
       67        .959  .955  .951  .946  .941  .936  .930  .923  .916  .908  .899  .890  .880  .870  .859  .848        67
       68        .961  .958  .954  .949  .944  .939  .933  .927  .920  .912  .904  .895  .886  .876  .865  .854        68
       69        .964  .960  .956  .952  .948  .943  .937  .931  .924  .917  .909  .900  .891  .881  .871  .861        69

       70        .966  .963  .959  .955  .951  .946  .941  .935  .928  .921  .914  .905  .896  .887  .877  .867        70
       71        .968  .965  .962  .958  .954  .949  .944  .939  .932  .926  .918  .910  .902  .893  .883  .873        71
       72        .970  .967  .964  .961  .957  .952  .948  .942  .936  .930  .923  .915  .907  .898  .889  .879        72
       73        .972  .970  .967  .963  .959  .955  .951  .946  .940  .934  .927  .920  .912  .904  .895  .886        73
       74        .974  .972  .969  .966  .962  .958  .954  .949  .944  .938  .932  .925  .917  .909  .901  .892        74



                                      11


<PAGE>


                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors
                       PENSIONER WHOSE RETIREMENT AGE IS:

<CAPTION>

  BENEFICIARY'S                                                                                                    BENEFICIARY'S
     AGE AT                                                                                                           AGE AT
   PENSIONER'S                                                                                                      PENSIONER'S
   RETIREMENT     55    56    57    58    59    60    61    62    63    64    65    66    67    68    69    70      RETIREMENT
<S>              <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>     <C>

       75        .976  .974  .971  .968  .965  .961  .957  .953  .948  .942  .936  .929  .922  .915  .906  .898        75
       76        .978  .976  .973  .970  .967  .964  .960  .956  .951  .946  .940  .934  .927  .920  .912  .904        76
       77        .979  .977  .975  .973  .970  .966  .963  .959  .954  .950  .944  .938  .932  .925  .917  .909        77
       78        .981  .979  .977  .975  .972  .969  .966  .962  .958  .953  .948  .942  .936  .929  .922  .915        78
       79        .982  .981  .979  .976  .974  .971  .968  .965  .961  .956  .951  .946  .940  .934  .927  .920        79

       80        .984  .982  .980  .978  .976  .973  .971  .967  .964  .960  .955  .950  .944  .938  .932  .925        80
       81        .985  .984  .982  .980  .978  .975  .973  .970  .966  .963  .958  .954  .948  .943  .937  .930        81
       82        .986  .985  .983  .982  .980  .977  .975  .972  .969  .965  .961  .957  .952  .947  .941  .935        82
       83        .987  .986  .985  .983  .981  .979  .977  .974  .972  .968  .965  .960  .956  .951  .946  .940        83
       84        .989  .987  .986  .985  .983  .981  .979  .977  .974  .971  .967  .963  .959  .955  .950  .944        84

       85        .990  .988  .987  .986  .984  .983  .981  .979  .976  .973  .970  .966  .962  .958  .954  .949        85
       86        .990  .989  .988  .987  .986  .984  .982  .980  .978  .975  .972  .969  .965  .961  .957  .952        86
       87        .991  .990  .989  .988  .987  .986  .984  .982  .980  .977  .975  .972  .968  .965  .960  .956        87
       88        .992  .991  .990  .989  .988  .987  .985  .984  .982  .979  .977  .974  .971  .967  .964  .960        88
       89        .993  .992  .991  .990  .989  .988  .987  .985  .983  .981  .979  .976  .973  .970  .967  .963        89
---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- --------------
                  55    56    57    58    59    60    61    62    63    64    65    66    67    68    69    70
</TABLE>

                       PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:        1971 TPF&C Forecast Mortality Table (Pensioner rate based on
                  85% male; Beneficiary rate based on 85% female)
Interest Rate:    7.5%
Effective:        January 1, 1984
Prepared by:      Towers Perrin



                                      12


<PAGE>

                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors
                       PENSIONER WHOSE RETIREMENT AGE IS:
<TABLE>
<CAPTION>

  BENEFICIARY'S                                                                                                   BENEFICIARY'S
     AGE AT                                                                                                          AGE AT
   PENSIONER'S                                                                                                     PENSIONER'S
   RETIREMENT     70    71    72    73    74    75    76    77    78    79    80    81    82    83    84    85     RETIREMENT
---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- --------------
<S>              <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>
       20        .708  .694  .679  .665  .650  .634  .619  .602  .586  .569  .553  .537  .521  .505  .490  .475        20
       21        .708  .694  .680  .666  .651  .635  .619  .603  .586  .570  .554  .537  .522  .506  .490  .475        21
       22        .709  .695  .681  .666  .651  .636  .620  .603  .587  .571  .554  .538  .522  .506  .491  .476        22
       23        .710  .696  .681  .667  .652  .637  .621  .604  .588  .571  .555  .539  .523  .507  .492  .477        23
       24        .711  .697  .682  .668  .653  .637  .621  .605  .588  .572  .556  .540  .524  .508  .492  .477        24

       25        .712  .697  .683  .669  .654  .638  .622  .606  .589  .573  .556  .540  .524  .509  .493  .478        25
       26        .712  .698  .684  .670  .655  .639  .623  .607  .590  .574  .557  .541  .525  .509  .494  .479        26
       27        .713  .699  .685  .671  .656  .640  .624  .608  .591  .575  .558  .542  .526  .510  .495  .480        27
       28        .715  .700  .686  .672  .657  .641  .625  .609  .592  .576  .559  .543  .527  .511  .496  .480        28
       29        .716  .702  .687  .673  .658  .642  .626  .610  .593  .577  .560  .544  .528  .512  .497  .481        29

       30        .717  .703  .688  .674  .659  .643  .627  .611  .594  .578  .561  .545  .529  .513  .498  .482        30
       31        .718  .704  .690  .675  .660  .645  .628  .612  .595  .579  .562  .546  .530  .514  .499  .483        31
       32        .719  .705  .691  .676  .661  .646  .630  .613  .597  .580  .564  .547  .531  .515  .500  .485        32
       33        .721  .707  .692  .678  .663  .647  .631  .615  .598  .582  .565  .549  .533  .517  .501  .486        33
       34        .722  .708  .694  .679  .664  .649  .633  .616  .600  .583  .566  .550  .534  .518  .502  .487        34

       35        .724  .710  .696  .681  .666  .650  .634  .618  .601  .585  .568  .552  .535  .520  .504  .488        35
       36        .726  .712  .697  .683  .668  .652  .636  .619  .603  .586  .570  .553  .537  .521  .505  .490        36
       37        .728  .713  .699  .685  .669  .654  .638  .621  .605  .588  .571  .555  .539  .523  .507  .492        37
       38        .730  .715  .701  .686  .671  .656  .640  .623  .606  .590  .573  .557  .541  .525  .509  .493        38
       39        .732  .717  .703  .689  .673  .658  .642  .625  .608  .592  .575  .559  .542  .526  .511  .495        39



                                      13


<PAGE>

                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors
                       PENSIONER WHOSE RETIREMENT AGE IS:

<CAPTION>

  BENEFICIARY'S                                                                                                    BENEFICIARY'S
     AGE AT                                                                                                           AGE AT
   PENSIONER'S                                                                                                      PENSIONER'S
   RETIREMENT     70    71    72    73    74    75    76    77    78    79    80    81    82    83    84    85      RETIREMENT
<S>              <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>
       40        .734  .720  .705  .691  .676  .660  .644  .627  .611  .594  .577  .561  .544  .528  .513  .497         40
       41        .736  .722  .708  .693  .678  .662  .646  .630  .613  .596  .579  .563  .547  .531  .515  .499         41
       42        .739  .724  .710  .696  .680  .665  .649  .632  .615  .599  .582  .565  .549  .533  .517  .501         42
       43        .741  .727  .713  .698  .683  .667  .651  .635  .618  .601  .584  .568  .551  .535  .519  .504         43
       44        .744  .730  .715  .701  .686  .670  .654  .637  .621  .604  .587  .570  .554  .538  .522  .506         44

       45        .747  .733  .718  .704  .689  .673  .657  .640  .623  .607  .590  .573  .557  .541  .525  .509         45
       46        .750  .736  .721  .707  .692  .676  .660  .643  .626  .610  .593  .576  .560  .543  .527  .512         46
       47        .753  .739  .725  .710  .695  .679  .663  .647  .630  .613  .596  .579  .563  .547  .530  .515         47
       48        .756  .742  .728  .713  .698  .683  .667  .650  .633  .616  .599  .583  .566  .550  .534  .518         48
       49        .760  .746  .732  .717  .702  .686  .670  .654  .637  .620  .603  .586  .570  .553  .537  .521         49

       50        .763  .749  .735  .721  .706  .690  .674  .657  .640  .624  .607  .590  .573  .557  .541  .525         50
       51        .767  .753  .739  .725  .710  .694  .678  .661  .644  .628  .611  .594  .577  .561  .544  .528         51
       52        .771  .757  .743  .729  .714  .698  .682  .665  .649  .632  .615  .598  .581  .565  .548  .532         52
       53        .775  .761  .747  .733  .718  .703  .686  .670  .653  .636  .619  .602  .585  .569  .553  .537         53
       54        .779  .766  .752  .737  .722  .707  .691  .674  .657  .640  .623  .607  .590  .573  .557  .541         54
---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ---- ------- --------------
                  70    71    72    73    74    75    76    77    78    79    80    81    82    83    84    85
</TABLE>

                       PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:        1971 TPF&C Forecast Mortality Table (Pensioner rate based on
                  85% male; Beneficiary rate based on 85% female)
Interest Rate:    7.5%
Effective:        January 1, 1984
Prepared by:      Towers Perrin



                                      14


<PAGE>

                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors
                       PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>

  BENEFICIARY'S                                                                                                   BENEFICIARY'S
     AGE AT                                                                                                          AGE AT
   PENSIONER'S                                                                                                     PENSIONER'S
   RETIREMENT     70    71    72    73    74    75    76    77    78    79    80    81    82    83    84    85     RETIREMENT
---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -------------
<S>              <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>

       55        .784  .770  .756  .742  .727  .712  .696  .679  .662  .645  .628  .611  .595  .578  .562  .545        55
       56        .788  .775  .761  .747  .732  .717  .700  .684  .667  .650  .633  .616  .599  .583  .566  .550        56
       57        .793  .779  .766  .752  .737  .722  .706  .689  .672  .655  .638  .621  .605  .588  .571  .555        57
       58        .798  .784  .771  .757  .742  .727  .711  .694  .678  .661  .644  .627  .610  .593  .577  .560        58
       59        .803  .789  .776  .762  .748  .732  .716  .700  .683  .666  .649  .632  .616  .599  .582  .566        59

       60        .808  .795  .781  .768  .753  .738  .722  .706  .689  .672  .655  .638  .621  .605  .588  .572        60
       61        .813  .800  .787  .773  .759  .744  .728  .712  .695  .678  .661  .644  .628  .611  .594  .578        61
       62        .819  .806  .793  .779  .765  .750  .734  .718  .702  .685  .668  .651  .634  .617  .601  .584        62
       63        .824  .812  .799  .785  .771  .756  .741  .725  .708  .691  .675  .658  .641  .624  .607  .591        63
       64        .830  .818  .805  .792  .778  .763  .748  .732  .715  .699  .682  .665  .648  .631  .615  .598        64

       65        .836  .824  .811  .798  .784  .770  .755  .739  .722  .706  .689  .672  .656  .639  .622  .606        65
       66        .842  .830  .818  .805  .791  .777  .762  .746  .730  .713  .697  .680  .663  .647  .630  .614        66
       67        .848  .836  .824  .812  .798  .784  .769  .754  .738  .721  .705  .688  .672  .655  .638  .622        67
       68        .854  .843  .831  .819  .806  .792  .777  .762  .746  .730  .713  .697  .680  .663  .647  .630        68
       69        .861  .849  .838  .826  .813  .799  .785  .770  .754  .738  .722  .705  .689  .672  .656  .639        69

       70        .867  .856  .845  .833  .820  .807  .793  .778  .762  .747  .730  .714  .698  .682  .665  .649        70
       71        .873  .863  .852  .840  .828  .815  .801  .786  .771  .755  .739  .723  .707  .691  .675  .658        71
       72        .879  .869  .859  .847  .835  .823  .809  .795  .780  .764  .749  .733  .717  .701  .684  .668        72
       73        .886  .876  .865  .855  .843  .831  .817  .803  .788  .773  .758  .742  .727  .711  .694  .678        73
       74        .892  .882  .872  .862  .850  .838  .825  .812  .797  .782  .767  .752  .736  .721  .705  .689        74



                                      15


<PAGE>


                                   Addendum D
                    MRP/RIP 50% Contingent Annuitant Factors
                       PENSIONER WHOSE RETIREMENT AGE IS:

<CAPTION>

  BENEFICIARY'S                                                                                                   BENEFICIARY'S
     AGE AT                                                                                                          AGE AT
   PENSIONER'S                                                                                                     PENSIONER'S
   RETIREMENT     70    71    72    73    74    75    76    77    78    79    80    81    82    83    84    85     RETIREMENT
<S>              <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>
       75        .898  .889  .879  .869  .858  .846  .834  .820  .806  .792  .777  .762  .746  .731  .715  .699         75
       76        .904  .895  .886  .876  .865  .854  .842  .829  .815  .801  .786  .771  .756  .741  .725  .710         76
       77        .909  .901  .892  .883  .872  .862  .850  .837  .824  .810  .796  .781  .766  .751  .736  .721         77
       78        .915  .907  .898  .889  .880  .869  .858  .845  .832  .819  .805  .791  .776  .762  .747  .731         78
       79        .920  .912  .904  .896  .886  .876  .865  .853  .841  .828  .814  .801  .786  .772  .757  .742         79

       80        .925  .918  .910  .902  .893  .884  .873  .861  .849  .837  .824  .810  .796  .782  .768  .753         80
       81        .930  .923  .916  .908  .900  .891  .880  .869  .858  .846  .833  .820  .807  .793  .779  .764         81
       82        .935  .929  .922  .914  .906  .898  .888  .877  .866  .854  .842  .830  .817  .803  .790  .776         82
       83        .940  .934  .927  .920  .913  .904  .895  .885  .874  .863  .851  .839  .827  .814  .800  .787         83
       84        .944  .939  .932  .926  .919  .911  .902  .892  .882  .871  .860  .849  .836  .824  .811  .798         84

       85        .949  .943  .937  .931  .924  .917  .909  .900  .890  .880  .869  .858  .846  .834  .821  .809         85
       86        .952  .947  .942  .936  .930  .923  .915  .906  .897  .887  .877  .866  .855  .843  .831  .819         86
       87        .956  .951  .946  .941  .935  .928  .921  .913  .904  .895  .885  .875  .864  .853  .841  .829         87
       88        .960  .955  .950  .945  .940  .934  .927  .919  .910  .902  .892  .882  .872  .862  .850  .839         88
       89        .963  .959  .954  .949  .944  .938  .932  .925  .917  .908  .899  .890  .880  .870  .859  .848         89
---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------ -------------
                  70    71    72    73    74    75    76    77    78    79    80    81    82    83    84    85
</TABLE>

                       PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:        1971 TPF&C Forecast Mortality Table (Pensioner rate based on
                  85% male; Beneficiary rate based on 85% female)
Interest Rate:    7.5%
Effective:        January 1, 1984
Prepared by:      Towers Perrin



                                      16


<PAGE>


                                 ADDENDUM E

      LEVEL INCOME OPTION -- FACTORS USING UP84 MORTALITY AND 7.5% INTERESt

<TABLE>
<CAPTION>

  AGE       0/12     1/12       2/12     3/12       4/12     5/12       6/12     7/12       8/12     9/12      10/12     11/12
  ---       ----     ----       ----     ----       ----     ----       ----     ----       ----     ----      -----     -----
  <S>     <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
   50     0.30410   0.30651   0.30892   0.31133   0.31374   0.31615   0.31856   0.32097   0.32338   0.32579   0.32820   0.33061
   51     0.33302   0.33570   0.33837   0.34105   0.34373   0.34641   0.34908   0.35176   0.35444   0.35712   0.35979   0.36247
   52     0.36515   0.36813   0.37111   0.37408   0.37706   0.38004   0.38302   0.38600   0.38898   0.39195   0.39493   0.39791
   53     0.40089   0.40421   0.40753   0.41085   0.41417   0.41749   0.42080   0.42412   0.42744   0.43076   0.43408   0.43740
   54     0.44072   0.44443   0.44814   0.45185   0.45556   0.45927   0.46297   0.46668   0.47039   0.47410   0.47781   0.48152
   55     0.48523   0.48938   0.49353   0.49768   0.50184   0.50599   0.51014   0.51429   0.51844   0.52259   0.52675   0.53090
   56     0.53505   0.53971   0.54437   0.54903   0.55369   0.55835   0.56301   0.56767   0.57233   0.57699   0.58165   0.58631
   57     0.59097   0.59621   0.60146   0.60670   0.61194   0.61719   0.62243   0.62767   0.63292   0.63816   0.64340   0.64865
   58     0.65389   0.65980   0.66572   0.67163   0.67755   0.68346   0.68938   0.69529   0.70121   0.70712   0.71304   0.71895
   59     0.72487   0.73156   0.73825   0.74494   0.75164   0.75833   0.76502   0.77171   0.77840   0.78509   0.79179   0.79848
   60     0.80517   0.81276   0.82035   0.82795   0.83554   0.84313   0.85072   0.85832   0.86591   0.87350   0.88109   0.88869
   61     0.89628   0.90492   0.91357   0.92221   0.93085   0.93950   0.94814   0.95678   0.96543   0.97407   0.98271   0.99136
   62     1.00000
</TABLE>


Mortality:        1971 TPF&C Forecast Mortality Table (85% male rate, 15%
                  female rate)
Interest:         7.5%



                                      1


<PAGE>

                                                    ADDENDUM F
                                        MRP/RIP LEVEL INCOME OPTION FACTORS
<TABLE>
<CAPTION>

   AGE       0/12      1/12      2/12     3/12       4/12     5/12       6/12     7/12       8/12     9/12      10/12     11/12
   ---       ----      ----      ----     ----       ----     ----       ----     ----       ----     ----      -----     -----
  <S>      <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
    50     0.30906   0.31148   0.31390   0.31632   0.31875   0.32117   0.32359   0.32601   0.32843   0.33085   0.33328   0.33570
    51     0.33812   0.34080   0.34349   0.34617   0.34886   0.35154   0.35423   0.35691   0.35960   0.36228   0.36497   0.36765
    52     0.37034   0.37332   0.37630   0.37929   0.38227   0.38525   0.38823   0.39122   0.39420   0.39718   0.40016   0.40315
    53     0.40613   0.40945   0.41277   0.41608   0.41940   0.42272   0.42604   0.42936   0.43268   0.43599   0.43931   0.44263
    54     0.44595   0.44965   0.45335   0.45705   0.46075   0.46445   0.46815   0.47186   0.47556   0.47926   0.48296   0.48666
    55     0.49036   0.49450   0.49863   0.50277   0.50690   0.51104   0.51517   0.51931   0.52345   0.52758   0.53172   0.53585
    56     0.53999   0.54462   0.54926   0.55389   0.55852   0.56316   0.56779   0.57242   0.57706   0.58169   0.58632   0.59096
    57     0.59559   0.60079   0.60599   0.61120   0.61640   0.62160   0.62680   0.63201   0.63721   0.64241   0.64761   0.65282
    58     0.65802   0.66388   0.66974   0.67560   0.68146   0.68732   0.69317   0.69903   0.70489   0.71075   0.71661   0.72247
    59     0.72833   0.73495   0.74157   0.74818   0.75480   0.76142   0.76804   0.77466   0.78128   0.78789   0.79451   0.80113
    60     0.80775   0.81525   0.82274   0.83024   0.83774   0.84524   0.85273   0.86023   0.86773   0.87523   0.88272   0.89022
    61     0.89772   0.90624   0.91477   0.92329   0.93181   0.94034   0.94886   0.95738   0.96591   0.97443   0.98295   0.99148
    62     1.00000
</TABLE>


Mortality:        1971 TPF&C Forecast Mortality Table (85% male rate, 15%
                  female rate)
Interest:         7.5%




                                      1